Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

FIFE COUNTY COUNCIL ORDER CONFIRMATION BILL

Considered; to be read the Third time Tomorrow.

Oral Answers to Questions — SCOTLAND

Physiotherapists

Lieut.-Commander Clark Hutchison: asked the Secretary of State for Scotland whether he is now in a position to make a statement on the qualifications required by physiotherapists employed under the National Health Service.

The Secretary of State for Scotland (Mr. Woodburn): No, Sir. The Committee set up by my right hon. Friend the Minister of Health and myself, and announced in the House on 19th May, 1949, is expected to report early next year.

Lieut.-Commander Hutchison: Will the report be published?

Mr. Woodburn: I would require notice of that question.

Land Drainage

Mr. McKie: asked the Secretary of State for Scotland if he will take steps to expedite the payment of land drainage grants by the Department of Agriculture for Scotland.

Mr. Woodburn: I am not aware of any general delay in the payment of land drainage grants; but if the hon. Member has some particular case in mind, I will be glad to look into it.

Mr. McKie: Is the right hon. Gentleman aware that there have been cases where more than a year has elapsed

before payment has been made, and that in the interval the proprietors concerned have been embarrassed by having to bear the whole cost themselves?

Mr. Woodburn: Of course, where a delay of that kind takes place there is probably a reason for it, but I will look into any question the hon. Member raises.

Mr. Malcolm MacPherson: asked the Secretary of State for Scotland when he expects to receive the report of the Committee on Land Drainage, under the chairmanship of Dr. Duncan.

Mr. Woodburn: I expect to receive this report very soon.

Mr. MacPherson: Can my right hon. Friend say if the report, when published, will be available in the Vote Office?

Mr. Woodburn: That is another question.

Planning Committees

Mr. Willis: asked the Secretary of State for Scotland if he will introduce legislation to amend the Local Government (Scotland) Act, 1947, so as to prohibit members of local authority planning committees from appearing before such committees as their own agents.

Mr. Woodburn: No, Sir. This is a matter which I consider should be left to the good sense of members of the committee.

Mr. Willis: Has my right hon. Friend seen the reports of the Edinburgh Planning Committee and is he aware of the expressions of concern which have been made, by members of all parties, at this particular practice? Will he look into this again?

Mr. Woodburn: This is a matter which is largely in the domain of the local authority itself and there is no reason why they should not make standing orders if they desire to make provision for such events. It is rather difficult to make general legislation on the basis of something committed by someone which someone else thinks is wrong.

Mr. Willis: But is it possible to make regulations and standing orders concerning them?

Mr. Woodburn: Yes.

Housing, Kirkcudbright

Mr. McKie: asked the Secretary of State for Scotland the numbers of houses and their cost built for county or Ministry officials since January, 1946, in the parishes of Kirkcudbright and Kelton in the Stewartry of Kirkcudbright.

Mr. Woodburn: I am informed that no houses built by the local authority in these parishes have been let either to county or to Government officials as such. One or two houses have been let to junior county employees who were entitled to them because of their position on the waiting list. Since January, 1946, licences have been issued for the building by private enterprise of two houses for county officials and one house for a technical officer of the Ministry of Agriculture and Fisheries. The licensed costs of these houses were £1,300, £1,450 and £1,700, respectively.

Mr. McKie: May I ask the right hon. Gentleman if he is aware that in two of these cases the amount expended exceeded the authorised limit and there has been considerable dissatisfaction among the rate-payers of the district? Will he take steps to show his disapproval of this kind of thing in the future?

Mr. Woodburn: I think it would be the duty of the hon. Member, if he has information of that kind, to bring it to my attention in the proper way.

Rural Water Schemes

Mr. Thornton-Kemsley: asked the Secretary of State for Scotland the starting dates for rural water schemes in the counties of Aberdeenshire, Angus and Kincardineshire where the schemes have been approved but work has not yet begun.

Mr. Woodburn: In the three counties mentioned, no rural water supply schemes are at present at the stage when starting dates can be fixed, but I foresee no difficulty in arranging early starting dates for the urgent local schemes which are expected to be contracted for in the immediate future.

Ploughs (Metal Parts)

Mr. Thornton-Kemsley: asked the Secretary of State for Scotland if he is awa that there is a shortage of metal parts for ploughs in the North-east of

Scotland; and what steps he is taking to improve the position.

Mr. Woodburn: I am not aware of any general shortage of metal parts for ploughs in the North-east of Scotland. I understand that the main distributing agents in the area for a particular firm of manufacturers have an outstanding demand for steel shares, mould-boards and slades for heavy ploughs. Increased production of these parts has been arranged by the manufacturers who hope to supply all orders within the next two or three weeks. If the hon. Member cares to let me have details of any particular cases he has in mind I should be glad to look into them.

Mr. Thornton-Kemsley: Yes, Sir, but has not the Minister heard that the local branches of the National Farmers' Union are at their wits' end about this shortage of all types of metal parts of ploughs of all makes? How can they be expected to undertake the Government's expansion programme if they have not got the spare parts for their implements?

Mr. Woodburn: All I can say is that if there has been this general feeling it is rather curious that they have not brought it to the notice of the people concerned.

Mr. MacPherson: Can my right hon. Friend give any estimate of what proportion of such parts are cast in Scottish foundries?

Mr. Woodburn: No, Sir.

Mr. Hector Hughes: Is my right hon. Friend aware that one step which could and should be taken immediately is to get the Tullos factory for making agricultural machinery re-started as soon as possible and have the men who were declared redundant there, restored to productive work?

Mr. Woodburn: Tullos did specialised work. I do not think that this particular factory deals with the spares under discussion.

Lord High Commissioner (Allowance)

Mr. Emrys Hughes: asked the Secretary of State for Scotland what was the allowance to the Lord High Commissioner for Scotland in the years 1947,


1948, 1949, respectively; and what economy cuts he is contemplating in this respect.

Mr. Woodburn: The allowances paid from the Consolidated Fund to the Lord High Commissioners in 1947, 1948 and 1949 were £2,000, £4,000 and £4,000, respectively. These sums were wholly utilised in meeting the necessary expenses of the office. The allowances for future years will be fixed, within the maximum prescribed by the Lord High Commissioner (Church of Scotland) Act, 1948, in the light of the circumstances prevailing at the time.

Mr. Hughes: Is not the Secretary of State aware that he is losing a magnificent opportunity to set a glorious example of economy in Scotland?

Mr. Mathers: Is my right hon. Friend aware that from my experience I can say that whatever the allowance is, it does not enrich the holder of the office? Is he also aware that if he continues to defend this office against malevolent criticism and attack he will be doing what is in keeping with the feelings of the majority of Scots?

Mr. Woodburn: Yes, Sir.

Boars (Licensing)

Sir John Mellor: asked the Secretary of State for Scotland what expense he incurred with regard to pigs in purported pursuance of the Improvement of Live Stock (Licensing of Bulls) Act, 1931, before 24th October, 1949, the date appointed by S.I., 1949, No. 1911, s. 131, for the application of the said Act to pigs as to cattle; by what authority he incurred this expense; and what was the date upon which such authority commenced.

Mr. Woodburn: The net expenditure incurred before 24th October, 1949, in administering the Improvement of Live Stock (Licensing of Boars) (Scotland) Regulations, 1946, was approximately £1,000. This expenditure was incurred under Section 12 of the Improvement of Live Stock (Licensing of Bulls) Act, 1931, Section 6 of the Agriculture (Miscellaneous Provisions) Act, 1944, and the regulations made under these Acts. The date upon which such authority commenced was 1st May, 1946.

Sir J. Mellor: Is it not a fact that the right hon. Gentleman forgot to appoint a date until he appointed 24th October last for this legislation to become applicable to pigs? In those circumstances how could he have any authority to incur expense before that date?

Mr. Woodburn: The hon. Member is thinking of two different orders. The second order dealt with that matter in one way and the first order dealt with it in another way.

Sir J. Mellor: Does the right hon. Gentleman suggest that the regulations of 1946 carried with them any authority to incur expense.

Mr. Woodburn: So far as I know the regulations made under that Order were in order.

Department of Agriculture (Staff)

Mr. Gilzean: asked the Secretary of State for Scotland how many persons are employed in the Department of Agriculture on the work of dealing with vermin; and of the total number so employed what proportion are executive and what proportion employed in other capacities.

Mr. Woodburn: The number of persons employed in the Department of Agriculture for Scotland in the destruction of vermin is 65, of whom 10 are technical and directing officers and 55 are foremen and trappers.

Mr. Scollan: How many of the people concerned come under the Minister of Health?

Football (Mid-Week Matches)

Mrs. Jean Mann: asked the Secretary of State for Scotland if his attention has been drawn to the mid-week football matches in Scotland, with attendances of 90,000; how often these events will be planned for the future; and what disturbance to work and trade is caused.

Mr. Woodburn: I am aware that an International football match between Scotland and Wales was played at Hampden Park, Glasgow, on Wednesday, 9th November, at which the attendance was just under 74,000. The only other international match in Scotland this season will be played against Switzerland


on Wednesday, 26th April, 1950, in the evening. With regard to the last part of the Question, I have received no representations since the match of 9th November.

Mrs. Mann: Has my right hon. Friend looked for any evidence in regard to the last part of the Question?

Mr. Woodburn: I should have thought that if anybody had a grievance they would express it, as is usually the case in Scotland, and so far that has not been done.

Colonel Gomme-Duncan: Does the right hon. Gentleman quite frankly think that in these difficult times this is desirable, particularly in view of the clearly expressed opinion of the Home Secretary in England some time ago?

Mr. Stokes: Has my right hon. Friend really any direct evidence to show that mid-week matches affect attendance at factories, for there is none in East Anglia?

Mr. Woodburn: There are various and strong opinions expressed on this point. The Government have considered this matter from time to time and I must confess that the amount of evidence that has come forward against the holding of a mid-week match from time to time has not been sufficient to justify the Government in considering any action. In Scotland the Football Association has behaved with discretion in this matter, and this has been the only big mid-week match played this winter.

Oral Answers to Questions — MINISTRY OF PENSIONS

Mineworker (Tuberculosis)

Mr. Thurtle: asked the Minister of Pensions if it is the practice of his Department to adjudge on the case of a man who was conscripted for service in the mines, although he wished to serve in the Army, and claims to have developed tuberculosis as a result of service in the mines.

The Minister of Pensions (Mr. Marquand): No, Sir. The war pension instruments do not enable compensation to be granted in the circumstances mentioned by my hon. Friend.

Mr. Thurtle: Will my right hon. Friend say whether this young man has any redress if as a result of his compulsory service he has contracted this disease?

Mr. Marquand: That is really not a question for me. It was clearly stated in 1944 by the present Foreign Secretary, who was Minister of Labour, at the time when these men were taken on, that the same rights of compensation would apply in respect of injury or death as in the case of other miners.

Mr. Somerville Hastings: Is my right hon. Friend aware that work in certain mines renders people more liable to tuberculosis than do ordinary occupations?

Mr. Marquand: That again is not a question for the Minister of Pensions.

War Disability Pensions

Mr. J. Langford-Holt: asked the Minister of Pensions whether in view of the increased cost of living as a result of the devaluation of the pound, he will now reconsider his decision not to appoint a Select Committee to consider war disability pensions.

Mr. Marquand: No, Sir.

Mr. Langford-Holt: Will the right hon. Gentleman tell the House whether it is his intention to make any increases to meet these new circumstances or alternatively, whether he is quite satisfied with the position of these pensioners?

Mr. Marquand: The only people who so far as I am aware have suffered from devaluation are pensioners living in hard currency countries, and I have already informed the House what I propose to do about them.

Mr. Langford-Holt: Then is the right hon. Gentleman arguing against the Chancellor of the Exchequer's statement that the cost of living is bound to rise?

Mr. Marquand: We cross our bridges when we come to them.

Lieut.-Commander Gurney Braithwaite: While the Government may not favour the machinery of the Select Committee which is suggested in this Question, does not the Minister feel that the time


has now come for a complete and comprehensive review of this question, particularly in view of the remission now being contemplated for Surtax payers of a certain kind?

Mr. Marquand: I am fully satisfied that all information that can be made available has already been made available to this House.

Limbless Men (Motorcars)

Mr. Emrys Hughes: asked the Minister of Pensions why an ex-soldier, William Fuller, 11/M/248961, who has suffered the loss of both legs and left arm, has not been allowed a free car; and when his case is likely to be considered.

Mr. Marquand: I am making further inquiries and will write to my hon. Friend.

Mr. Hughes: While recognising the work which the Minister is doing for these ex-Service men, I should like to ask the Minister whether he will get into touch with the Minister of Supply to see that cars for these limbless ex-Service men will have priority over luxury motor cars as the appearance of photographs of £6,000 Rolls Royce cars in the newspapers is making these ex-Service men wonder whether they should not have priority?

Mr. Collins: Can my right hon. Friend say whether any disabled ex-Service man who has lost both legs and arms has been given a special car in view of the difficulty of ensuring that the handling of the controls is safe for him and for the public?

Mr. Marquand: Not without notice.

Oral Answers to Questions — BRITISH ARMY

Staff Training

Brigadier Prior-Palmer: asked the Secretary of State for War whether he will now consider providing refresher courses in staff training for officers in the Regular Army Reserve.

The Secretary of State for War (Mr. Shinwell): This proposal has again been considered but the position remains as stated in my reply to the hon. and gallant Member on 22nd February, 1949.

Brigadier Prior-Palmer: Will the right hon. Gentleman give this matter further urgent consideration in view of the fact that there are a large number of ex-staff officers who are only too willing and anxious to avail themselves of this opportunity, and also in view of the vital importance of keeping up to date the junior grade staff officers who are now in civilian life?

Mr. Shinwell: I appreciate the fact that the Reserve officers are anxious to undergo these refresher courses, but it is not a practical proposition at the moment. However, the matter will be kept under review.

Colonel Gomme-Duncan: Can the Minister say on what grounds this idea was turned down? Was it because of finance or otherwise?

Mr. Shinwell: It was because of a combination of circumstances. I could not reply in detail at this stage.

Medical Service, Gibraltar

Sir Wavell Wakefield: asked the Secretary of State for War if he is satisfied that the standard of medical attention provided for military personnel stationed in Gibraltar, and in particular for their families, is of the necessary quality.

Mr. Shinwell: I am satisfied with the standard of medical attention provided for the Army and for military families in Gibraltar. No criticism of the standard has been expressed to me, but I should be pleased to investigate any specific complaint.

Sir W. Wakefield: Is the right hon. Gentleman aware that many Service families have to seek treatment from civilian doctors owing to the inadequacy and inefficiency of the military service provided, and will he make further inquiries upon that point?

Mr. Shinwell: I think that in the circumstances the hon. Member might furnish me with some details. I myself visited the hospital in Gibraltar some time ago and in my judgment it seemed to be efficient.

Sir W. Wakefield: I will with pleasure give the right hon. Gentleman examples to show that this Question is not without substance.

Officers' Families (Housing)

Sir W. Wakefield: asked the Secretary, of State for War (1) if, in view of the difficulty of housing accommodation for officers and their families transferred from one station to another, he will grant 75 per cent. of legal expenses and of purchase of a new house and sale of old up to a maximum of £140 as allowed in the Civil Service;
(2) why officers who are moved from one station to another are not reimbursed the cost of the transfer of tenancy at the old station or of lodging allowance for continued liability until termination of tenancy as granted in the Civil Service.

Mr. Shinwell: As in the case of similar Questions addressed to me by the hon. Member on 21st June and 31st May, I would refer him to the reply given by my right hon. Friend the Minister of Defence on 13th April to a Question by the hon. Member for North Blackpool (Mr. Low).

Sir W. Wakefield: Is the right hon. Gentleman aware that Service families incur a great expense by continually moving about, and can he say why it is that they, with more moving to do than the Civil Service, should be at so much disadvantage? Cannot this matter be looked into again?

Mr. Shinwell: It has been looked into several times. We do take account of the fact that these frequent postings cause expense to be incurred but, on the other hand, we take account of the frequent postings in determining the nature of the emoluments.

Barrack Accountants

Lieut. - Commander Hutchison: asked the Secretary of State for War (1) how many Service pensioners are now on the waiting list for employment as barrack store accountants and barrack inventory accountants;
(2) how many Service pensioners have obtained employment as barrack store accountants and barrack inventory accountants since 22nd February, 1949.

Mr. Shinwell: There are now 455 individuals on the waiting list for employment as barrack store accountants and barrack inventory accountants. No Service pensioners have obtained employment in these posts since 22nd February, 1949.

Lieut.-Commander Hutchison: Cannot the right hon. Gentleman hold out any hope of there being employment in these grades for any substantial number of these pensioners in the near future?

Mr. Shinwell: The position fluctuates. I would not care to say off-hand that we could give a definite guarantee of employment in the near future. However, there will be a Question on the Order Paper later in the month, and I may be able to give some information then

National Service Men (Overseas Posting)

Mr. Longden: asked the Secretary of State for War how long young conscripts are expected to be kept in distant stations like East Africa; and how many he intends to bring home for Christmas.

Mr. Shinwell: National Service men must continue to be sent to distant stations abroad, so long as the fulfilment of our overseas commitments renders this necessary. Such men are at present liable to serve up to a maximum of about 13 months in the Far East, or 15 months in the Middle East. There can be no question of bringing home National Service men specially for Christmas. On present plans, men called up in the latter part of February, 1948, will be released in time to spend Christmas at their homes.

Meritorious Service Medal

General Sir George Jeffreys: asked the Secretary of State for War what are now the conditions of award of the Meritorious Service Medal; and what steps have been taken to speed up the award to those who have been recommended for it.

Mr. Shinwell: To qualify for registration for the Meritorious Service Medal, a candidate must have 21 years' Colour Service, be at least a sergeant, possess the Long Service and Good Conduct Medal and have an exemplary character. A candidate is registered on the recommendation of his commanding officer and remains on the waiting list until his turn for an award occurs. The waiting list is long and the method of selection adopted is to take the oldest eligible candidate belonging to the branch of the Army to which the vacant award is allotted. The question of speeding up the award of this medal to those who


have been recommended for it, has recently been investigated by a Working Party within my Department and is under consideration.

Sir G. Jeffreys: Is the right hon. Gentleman aware that on 13th April, 1948, he gave me an answer on this subject and he said then that the conditions were under consideration; further, is he aware that one old soldier recently received this medal after waiting for 33 years and that he died within a week of receiving it? Will the right hon. Gentleman cause this method to be really speeded up and, in view of the small sum involved, will he cause the issue both of the medal and of the annuity to be very greatly accelerated?

Mr. Shinwell: The position is that in the past, generally speaking—there may have been exceptions—the medal was awarded simultaneously with the granting of an annuity. It is precisely that point that we have been investigating. I think that a conclusion may be reached, which will be implemented shortly, that we may award a medal without regard to the granting of the annuity which may come later on.

Dress

Major Tufton Beamish: asked the Secretary of State for War whether he is aware of the widespread hope that mess kit will be reintroduced in the near future; whether he has considered the possibility of making mess kit available through Army channels at cost price; and if he will make a statement.

Mr. Shinwell: I am aware of the desire of the Army for a smarter alternative to battledress. It is, however, the policy of my Department to give prior importance to the introduction of No. 1 dress, which is suitable for evening wear in the mess, rather than to mess dress, which is at present in abeyance. All young Regular officers may buy No. 1 dress on appointment to first commission and there is a quota system whereby not more than 20 per cent. of other Regular officers may buy the dress each year as Service dress and the pre-war blue patrols wear out. In present circumstances, I cannot agree to the reintroduction of mess dress.

Major Beamish: Does that mean that the Secretary of State for War has dismissed the idea of reintroducing mess kit? Is he aware that blue patrols and No, I dress are both dull and unattractive, and does he not agree that a brighter uniform would be most desirable?

Mr. Shinwell: I have not dismissed any of the matters referred to by the hon. and gallant Member, but in present circumstances I cannot agree to the reintroduction of mess dress. When the circumstances change the matter will be reconsidered.

Lieut.-Colonel Sir Thomas Moore: If the Minister cannot meet the desire expressed by my hon. and gallant Friend, would he consider devising a mess kit suitable for the consumption of a dish of fish and chips?

Mr. Shinwell: If the hon. and gallant Member will make representations to me about the consumption of that very edible commodity, I will give them my sympathetic consideration.

Mr. Nally: In view of the obvious desire of my right hon. Friend to oblige the Opposition in their continued demands for economy, can we have a specific assurance from him that in no circumstances will public money be expended on providing a subsidy for evening dress for officers that is not worn more than once in every six weeks?

Mr. Shinwell: I am not prepared to give my hon. Friend that assurance. As I have said, we operate in accordance with circumstances.

Pay Offices (Removal)

Mr. J. Langford-Holt: asked the Secretary of State for War what economy in labour and money it is expected will be achieved by the removal of the regimental pay office from Shrewsbury to Ashton-under-Lyne; and if he will give an assurance that no further move is contemplated.

Mr. Shinwell: The regimental pay office, Shrewsbury, is being closed and the work transferred to Chester and Ashton-under-Lyne. This is part of a general reorganisation of pay offices recommended in the interests of economy and efficiency, by a Departmental Committee, which will reduce the number of


offices in the United Kingdom from 26 to 15 and will result in a saving of staff of approximately 10 per cent. Practically the whole of the staff at Shrewsbury have been offered transfer to Chester, and no further move of the Chester office is contemplated. No further move of the office at Ashton-under-Lyne will, it is hoped, take place until the pay office moves to its permanent location, which has not yet been decided. The staff at Ashton-under-Lyne are not disturbed by the present reorganisation.

Mr. Osborne: Does that answer mean that the right hon. Gentleman has abandoned the scheme for centring the Pay Office of the Army in Leicester?

Mr. Shinwell: We are at present considering as much centralisation as is practicable, in order to reduce the staff, and, at the same time, effect substantial economies.

Mr. Langford-Holt: asked the Secretary of State for War what was the cost and advantage of removing the Royal Army Medical Corps' pay office from Kidderminster to Aldershot, Aldershot to Oxford, Oxford to Nottingham, within two years; and if he will give an assurance that no further moves are now contemplated.

Mr. Shinwell: As the answer is necessarily rather long, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. George Ward: Would the Minister agree that, if these people returned their magic carpet to Kidderminster, they might settle down?

Following is the answer:

The Royal Army Medical Corps pay office was moved in July, 1947, from the factory which it occupied at Kidderminster, in accordance with the general policy of releasing, so far as possible, those premises required for export production. The only accommodation available at that time was in Lille Barracks, Aldershot. In February, 1948, the training and vehicle facilities available at Lille Barracks were required for one of the units returning from overseas commands, which were at that time deployed in Southern Command, and the pay office was again moved to the only available accommodation in Slade Camp, Oxford. This accommodation was far from suitable and being on requisitioned

land would eventually have to be released. Accordingly, effect was given, in September, 1949, to a recommendation by a Departmental Committee, by amalgamating the pay office with that of the Women's Royal Army Corps. This entailed moving the Royal Army Medical Corps pay office to Nottingham, but resulted in more suitable accommodation being utilised and, as a result of the amalgamation, an economy in staff and overheads.

Considerable research would be needed to establish the full cost of these moves, including the transport and disturbance expenses of the staffs, but the works services which became immediately necessary have cost some £1,300

No further move of the pay office will, it is hoped, take place until the pay office moves to its permanent location, which has not yet been decided.

Demobilisation, Malaya (Clothing)

Colonel J. R. H. Hutchison: asked the Secretary of State for War what arrangements are made for men demobilised from the Forces in Malaya to be shipped with suitable clothing in view of the change of temperature between Malaya and Great Britain.

Mr. Shinwell: The articles of clothing which should be in the possession of a soldier moving from one station to another are defined in Clothing Instructions. They include woollen gloves, jersey, battle-dress and greatcoat, and, during the winter season, woollen underwear for soldiers drafted from tropical to temperate climates. Stations overseas are periodically reminded of these instructions.

Colonel Hutchison: In view of that answer, will the right hon. Gentleman look into the case of certain Scottish soldiers returning from Malaya, who were issued with two blankets for the voyage but were otherwise in tropical kit until arriving at Aldershot, where they were issued with battledress and greatcoat, which were so dirty that they refused to have them, with the result that they caught colds?

Mr. Shinwell: It was only in July of this year that we issued these precise instructions to the Far East Command, but if the hon. and gallant Gentleman will let me have specific information I will certainly look into it.

Brigadier Head: Is it in order for a Scottish soldier to wear woollen underwear?

Discharges (Invalids)

Mr. Janner: asked the Secretary of State for War the average number of young men, per year, who have been invalided from the Army since the end of the war.

Mr. Shinwell: The average yearly number of men who have been invalided from the Army since August, 1945, is 32,616. This figure excludes 9,518 men who were invalided out as a result of wounds between August, 1945, and December, 1946.

Mr. Hastings: Is my right hon. Friend satisfied that sufficient care is taken in the examination of recruits to prevent this waste of manpower?

Mr. Shinwell: Every recruit has an examination and the number of rejects is substantial.

Oral Answers to Questions — TOWN AND COUNTRY PLANNING

Caravan Sites

Air-Commodore Harvey: asked the Minister of Town and Country Planning how many county boroughs have established or approved caravan sites within their boundaries.

The Minister of Town and Country Planning (Mr. Silkin): I regret that the information for which the hon. and gallant Member asks is not available, and could not be secured without a disproportionate expenditure of time and labour.

Air-Commodore Harvey: Is the right hon. Gentleman aware that, owing to the housing shortage, many caravan sites are seriously overcrowded, and will he consult the local authorities to see if additional sites can be made available in proper places?

Mr. Silkin: That is not really a matter for my Department.

Brigadier Prior-Palmer: Is the Minister further aware that certain authorities are withdrawing licences for caravan sites just as the winter is beginning, thereby causing

great hardship, and would he go into the matter and perhaps issue some instructions?

Mr. Silkin: This would be interfering with the work of some other Departments, such as the Ministry of Health and the Ministry of Education.

Brickfields, Bedfordshire

Mr. Skeffington-Lodge: asked the Minister of Town and Country Planning if he has considered the application made to him by the brickmaking interests in Bedfordshire for an extension of the area of their activities; if, before approving it, he will consult with the Minister of Agriculture to ensure that agricultural production will not be adversely affected thereby; and what has so far been done to restore areas already affected by brickmaking.

Mr. Silkin: In considering applications of this sort, I always consult my right hon. Friend the Minister of Agriculture, and I always look carefully into the possibility of restoring the land afterwards. Complete restoration of these brickfields is not always likely to be possible, however, because of the depth of working, the flooding by water and the lack of adequate supplies of suitable filling material within a reasonable distance; but where such material is available, we make the best use of it we can.

Mr. Skeffington-Lodge: Is my right hon. Friend aware that that reply is all right as far as it goes, but that it does not go very far? May I ask him whether he is aware that, until the past depredations of the brickmaking interests in Bedfordshire are cleared up better than they have been so far, there is not much local confidence that his Ministry is going to do much about the new application on which my Question is based?

Mr. Silkin: The planning Acts under which we are acting relate to present depredations, not to past. These things to which the hon. Gentleman refers took place before the Act was passed.

Mr. Stokes: May I ask my right hon. Friend whether he is aware that, in this particular area, it is not invariably possible to replace the top soil after excavations?

Mr. Silkin: No, it is not, and if my hon. Friend will read the answer to the Question he will see that I have given the reason in some detail.

Mr. David Renton: Is the right hon. Gentleman aware that, owing to the considerable depth of these disused brick-fields, they will probably be considered best for water conservation and possible game preserves, and will he bear in mind the possibility of using them for those purposes?

Mr. Silkin: Each case is considered on its merits, and the most suitable form of restoration is provided for.

Mr. Harrison: Does my right hon. Friend give the necessary instructions or draw the attention of these people to the possibility of utilising the top soil from these excavations, and not burying it in deep holes under water?

Mr. Silkin: Certainly, wherever possible.

Mr. Skeffington-Lodge: Owing to the rather lukewarm approach of my right hon. Friend, I beg to give notice that I shall raise this matter on the Motion for the Adjournment.

Peak District

Mr. H. D. Hughes: asked the Minister of Town and Country Planning if he has considered the proposal of the Derbyshire, Cheshire and Staffordshire County Councils that a joint advisory committee be set up for the Peak District National Park instead of a joint board; and if he is satisfied that this form of machinery is applicable in this case.

Mr. Silkin: No such proposals have been made to me. The question of the appropriate organisation will be a matter for consideration if the area is designated as a National Park when the Bill now before Parliament becomes law.

Mr. Hughes: In order to avoid waste of time and labour, will my right hon. Friend remind the authorities of the assurances given to this House and in Committee that a joint advisory committee should be set up only in exceptional cases, and will he make it clear that the Peak District will not in any case be considered an exceptional case?

Mr. Silkin: My hon. Friend will not expect me to give a decision on a matter before it has actually reached me, but I certainly would remind all local authorities of Clause 8 of the Bill.

Service Land Requirements, Pembrokeshire

Mr. Watkins: asked the Minister of Town and Country Planning if he will give the reason for the delay in announcing the result of the local public inquiry into the Service land requirements at Castell Martin, Pembrokeshire, held over 12 months ago; and when his decision will be made known.

Mr. Silkin: I regret the delay, but I hope to announce a decision in the very near future.

Mr. Watkins: May we have an assurance from the Minister that his decision will be expedited, because of what happened in Pembrokeshire, and because nearly all this land is in proposed national park areas?

Mr. Silkin: I will certainly do my best to give a very speedy decision.

Tree-felling, Harting

Mr. Joynson-Hicks: asked the Minister of Town and Country Planning whether he is aware of the decision of the Harting Parish Council to fell the beech trees at the Warren at Harting in West Sussex; and if he will take immediate steps to secure the preservation of this beauty spot.

Mr. Silkin: I understand that the felling referred to was carried out by the parish council on the advice of a forestry expert that the trees concerned were dangerous, but that replanting with standard hardwoods will be undertaken.

Mr. Joynson-Hicks: Is the Minister satsified with the professional advice to which he refers, because there is some doubt whether any professional advice was officially taken or not, and has he further considered the necessity for devastating this lovely beauty spot?

Mr. Silkin: Of course, it is not for me to judge of the adequacy or otherwise of the advice given to the parish council, but the fact is that these trees have been


felled as dangerous and that nothing I can do can restore them. I can only make sure that replanting takes place.

Mr. Joynson-Hicks: Is the Minister aware that all the trees are not yet felled and that he can stop the process and, if he is satisfied that the professional advice was insufficient, will he do so?

Development Charge, Meopham

Sir Richard Acland: asked the Minister of Town and Country Planning whether he is satisfied that a development charge is rightly asked from Mr. Leonard, of Meopham, particulars of whose case have been sent him showing that he built riding stables on his land in 1938 and, since being prevented from securing feedingstuffs for horses, has converted these into bungalows.

Mr. Silkin: I regret that I cannot undertake to answer Questions about individual cases involving payment of development charge. These are the responsibility of the Central Land Board. I am however, arranging for the views of the Board to be communicated to my hon. Friend.

Sir R. Acland: As there is a principle involved in this in that the man in question was encouraged to go ahead by the local valuer who advised him confidently that no development charge would be made, will the Minister do his utmost to make sure that the decision when reached by the Land Board is in favour of this man?

Mr. Silkin: I have explained that I cannot deal with an individual case, but in so far as any question of principle is involved, I will certainly look into the question.

Sir R. Acland: Can the Minister give us an idea when the date of this will be because it has been before the right hon. Gentleman and the Land Board for some months?

Mr. Silkin: I will do my best to expedite the matter.

Mr. Driberg: On a point of Order. Does my right hon. Friend's answer mean that this is a further restriction on the right of back benchers to ask Questions

of Ministers, and that the Table will in future refuse Questions of this nature?

Mr. Speaker: I have no idea. This is the first time I have heard this answer, and, therefore, I should like to have time to consider it.

Mr. Driberg: May I give notice to my right hon. Friend that if he does find it necessary to refuse to answer Questions of this kind, and to refuse responsibility for them, it merely means that the list of Adjournment Motion subjects will be very gravely overloaded, because they will all have to be raised on the Adjournment?

Mr. Boyd-Carpenter: Does the right hon. Gentleman's undertaking to look into cases where questions of principle arise, mean that he is willing to answer Questions affecting individual cases which also raise a special principle?

Mr. Silkin: No, Sir, it does not. I have said quite clearly that I cannot undertake to answer Questions about individual cases. In this particular case, I am informed that a question of principle is involved, and I will discuss that question of principle with the Central Land Board.

Mr. Emrys Roberts: Does the Minister's answer imply that he will examine every individual case where a matter of principle arises?

Mr. Silkin: No, Sir, it does not imply that. The individual cases are the responsibility of the Central Land Board, and I am not prepared to take that responsibility away from them. But where a question of principle arises, then I think it is right that they should be considered.

Mr. Oliver Stanley: Can the right hon. Gentleman say who decides when a question of principle arises? Is it the hon. Member who puts the Question who takes the responsibility of saying that a question of principle is involved, or does the right hon. Gentleman have to examine the case in order to see whether that principle is there or not?

Mr. Silkin: I have to make the decision, and I make it on such information as comes to me in a variety of ways.

Mrs. Leah Manning: On a point of Order. May I ask, Mr. Speaker, if you will be ruling that the Central Land Board now falls within the same category as the nationalised industries?

Mr. Speaker: I cannot answer such questions offhand. I should like notice of that.

Sir Waldron Smithers: On a point of Order. May I ask, Mr. Speaker, whether you have noticed the growing revolt on the back benches of the Labour Party?

Mr. Speaker: That is not a point of Order.

Sir R. Acland: In view of the merits of this case, and in order to test the position of the Minister in this matter, I wish to give notice that I shall try to raise this matter on the Adjournment.

Land Sales (Price)

Mrs. Middleton: asked the Minister of Town and Country Planning what steps he proposes to take to ensure that the purposes of the Town and Country Planning Act, 1947, in relation to the sale of land are carried out, and that would-be purchasers are not asked excessive prices by vendors who have lodged claims for compensation from the £300 million fund.

Mr. Silkin: Purchasers of land for development are strongly advised to buy only on the terms recommended in the Central Land Board pamphlet, "House 1," with which the hon. Lady is familiar. Where approved development is being prevented because an excessive price is being asked for the land, there is a case for consideration of purchase, either by the local authority under Section 38 of the Town and Country Planning Act, 1947, or by the Central Land Board under Section 43 of the Act.

Mrs. Middleton: It was very difficult to hear the Minister's reply. Will my right hon. Friend say whether he will take steps to see that the Central Land Board do use the powers entrusted to them under Section 43 to the 1947 Act to acquire compulsorily land in the circumstances I have outlined; and can he be sure that up to the moment the result of the 1947 Act has not been to inflate the price of land rather than to restrict it to existing value?

Mr. Silkin: I am quite satisfied that the Central Land Board are using their powers under Section 43 where appropriate, and I am also satisfied that the effect of the 1947 Act has not been to inflate land prices.

Mr. Stokes: Has it not been my right hon. Friend's experience that almost invariably, people who deal in land have had to pay too much under his regulations and that only when local authorities are concerned is a fair price paid?

Mrs. Middleton: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment at the earliest possible moment.

Oral Answers to Questions — NATIONAL INSURANCE

Retirement Pensions

Mr. Ralph Morley: asked the Minister of National Insurance in view of the increase in the cost of living, actual and anticipated, from the devaluation of the pound sterling in relation to the dollar, what increase he proposes to make in amounts paid for old age pensions.

The Minister of National Insurance (Mr. James Griffiths): I assume my hon. Friend is referring to the basic rate of retirement pensions under the National Insurance scheme. This would involve an increase in contributions which I am not prepared to contemplate in present circumstances.

Mr. Lipson: Will the right hon. Gentleman give an assurance that, through his National Insurance officers, he will see that he is accurately informed of the effects of the increase in the cost of living on old age pensioners?

Mr. Griffiths: Yes, Sir.

Claimants (Medical Examination)

Dr. Broughton: asked the Minister of National Insurance what persons are empowered by his regulations to refer cases to regional medical officers for a second medical opinion.

Mr. J. Griffiths: The regulations empower me to require sickness benefit claimants to undergo examination for a second medical opinion. The local office


manager refers the cases selected to a senior medical officer of the Health Department who consults the patient's own doctor when deciding whether a case should go to the regional medical officer. The patient's doctor is invited to be present at any examination.

Dr. Broughton: Is my right hon. Friend aware that some medical practitioners would like to be able to refer some of their own patients to regional medical officers for a second opinion on fitness for work just as they refer cases to their professional colleagues for a second opinion on diagnosis and treatment, and will he discuss this matter with his right hon. Friend the Minister of Health with a view to making simple arrangements whereby general medical practitioners may refer cases to regional medical officers?

Mr. Griffiths: Some of the general practitioners do refer cases to the regional medical officer, and that is a practice which we seek to encourage on every possible occasion.

Clothing Allowances

Mrs. Mann: asked the Minister of National Insurance (1) if he is aware of the hardship caused to sick people and the aged by the inadequate allowances now granted for winter clothing; and what steps he will take to prevent these people suffering greater hardship because of the change created by the 1948 Act;
(2) if he is aware that applicants to Appeal Boards for clothing on the pre-1948 scale, are now told that this must be refused on instruction from the Labour Government; and what steps he proposes to take to prevent political prejudice being brought into the day-to-day working of these Appeal Boards.

Mr. J. Griffiths: I have been in touch with the National Assistance Board on the matters raised in these Questions. On the information before me, I cannot accept the general implications contained in them. If my hon. Friend has individual cases in mind, I should be glad if she would let me have particulars, in order that I may cause any necessary inquiries to be made.

Mrs. Mann: Can my right hon. Friend say whether the appointments of chairmen

to the appeal boards are made on the basis of non-political allegiance, and whether, in view of the fact that in most boroughs the chairmen of such boards have been the leaders of the Conservative Party in those boroughs for a period of years, this is political allegiance, or whether it is only political allegiance where a person happens to be of Labour politics?

Mr. Griffiths: These chairmen are appointed because of the experience they had of the work before the new scheme started. My hon. Friend has made certain allegations against one of the chairmen. It is impossible for me to inquire into the matter until I have the particulars. When I have the particulars, I will make inquiries.

Colonel Gomme-Duncan: Is there anything wrong in saying that these are the instructions of the Government of the day? It seems perfectly normal.

Mr. Griffiths: The business of the tribunal is to adjudicate between the Board and the applicant, and not to issue political statements.

National Assistance Regulations

Mr. Collins: asked the Minister of National Insurance if he is aware that the present scale of assistance grants is insufficient to enable pensioners without other income to purchase their full entitlement of rationed foodstuffs; and if he will investigate the matter with a view to arranging for increased grants in cases of need.

Mr. Oliver: asked the Minister of National Insurance whether consideration is being given to amending the existing National Assistance Regulations respecting the assessment of need to meet the increasing difficulties of old age pensioners and others falling within the provisions of the regulations.

Mr. J. Griffiths: I cannot accept the statement that the present scales do not enable pensioners to buy their full share of rationed foodstuffs. These rates, which were a considerable improvement on those previously in operation, were generally welcomed when they were approved by this House last year. In addition, the Board have wide powers


of discretion to meet the special circumstances of any individual case, which they exercise on an extensive scale. The position is, of course, kept under constant review by the National Assistance Board.

Mr. Collins: Is my right hon. Friend aware that, while I agree that the present scales are far in advance of anything previously applied, if one allows for rent and unrationed foodstuffs and such things that people must have, the present allowances are not nearly sufficient for an old couple living together? Will my right hon. Friend consider this matter again and, as was suggested previously, ask his officers to ascertain whether there is not some hardship involved at present?

Mr. Griffiths: I would call my hon. Friend's attention to what the Board say in their report. When they made a test in November, 1948, 25 per cent. of all the pensioners were receiving special allowances over and above the supplementary scale. From my experience, what very often causes most distress is the number—perhaps a large number—of old age pensioners who are not making application for the supplementary allowance to which they are entitled. I appeal to hon. Members in all parts of the House to encourage old age pensioners to apply for the supplementary allowance.

Mr. Oliver: Is my right hon. Friend aware that there has been a change—I do not know to what extent—since the regulations were made more than a year ago? Must my right hon. Friend await the decision of the Assistance Board before he himself can come to a conclusion?

Mr. Griffiths: I would remind my hon. Friend that the scales which were adopted in July, 1948, meant an increase of 20 per cent. for single persons and 14 per cent. for married persons. There were substantial improvements for most people concerned in the country.

Mr. Oliver: What were the increases since that date?

Mr. Griffiths: As I have said, there is power to make discretionary payments, and the matter is continually kept under review by the Board.

Mr. Chetwynd: Could my right hon. Friend give us any idea of the scope of

discretionary payments which are being made, either in terms of the average per person or the lump sum as a whole?

Mr. Griffiths: The total amount given last year in discretionary payments was £2,900,000. If my hon. Friend would like further details and will put down a Question I will do my best to supply them.

Mr. Austin: In view of my right hon. Friend's influence in this matter, would he consider giving a lead to the National Assistance Board and review the regulations?

Mr. Griffiths: The initiative rests the other way.

Merchant Seamen

Mr. Spearman: asked the Minister of National Insurance what he intends to do to remedy the unfairness to merchant seamen who have to pay full contributions under the National Insurance scheme, but who, being mostly outside the United Kingdom, are unable to obtain treatment under the Health Service.

Mr. J. Griffiths: It is a fundamental principle of the National Insurance scheme that the contributions paid by insured persons should be at flat rates and should not be related to individual circumstances. Special provision has been made for merchant seamen under this scheme, in consultation with the two sides of the shipping industry, and I am satisfied that they are not unfairly treated.

Mr. Spearman: Does the Minister think that it would be more fair to these men if he could remit that portion of their contributions for which they can get no return?

Mr. Griffiths: No. That would be a complete departure from the scheme. We have discussed the special position of the seamen with the Mariners Board. We have made certain concessions for them. They are allowed sickness benefit and unemployment benefit while they are outside the country, and we remit a certain sum to the Mariners Board to be used for the welfare of seamen.

Mr. Driberg: Would my right hon. Friend point out the fallacy underlying


this Question, since the National Health Service is not for the most part financed out of the weekly contributions to the National Insurance scheme? Since this fallacy is widespread—although it has been repeatedly exposed—could my right hon. Friend take steps to make the facts further known?

Mr. Griffiths: It has been pointed out, but I will look into it further.

Brigadier Prior-Palmer: Is the Minister aware that a seaman, in order to obtain his sickness benefit, has to appoint somebody at home to apply for it while he is abroad? Is the Minister further aware that there are many seamen who are not aware of that regulation, and would he publicise the fact so that no hardship may accrue?

Mr. Griffiths: This arrangement has been made after full consultation with both sides of the industry, and I think it is well known. I will discuss the matter with them further in order to find out whether further publicity should be given.

Oral Answers to Questions — INDUSTRIES (VISITS BY MINISTERS)

Mr. Erroll: asked the Prime Minister if he is aware of the growing number of visits to industrial undertakings being made by Ministers who have no Departmental responsibilities towards them; and whether he will give instructions for such visits to cease in view of the interference with the work of management and staff which they cause.

The Prime Minister (Mr. Attlee): I am satisfied that visits of Ministers to industrial undertakings do not have adverse effects of the kind suggested by the hon. Member. On the contrary, I think it is desirable, particularly in the present economic circumstances, that Ministers should whenever possible acquaint themselves personally with the problems and achievements of both employers and workers.

Mr. Erroll: Can the Prime Minister explain why it was necessary for the Minister of Food to visit the Steel Company of Wales quite recently?

The Prime Minister: I do not know why it was necessary, but as he comes from Wales it might be a very good thing for him to see it.

Miss Jennie Lee: Does my right hon. Friend agree that it is a good thing in these difficult times to maintain as far as possible old traditions, and is it not an old tradition well known on the other side of the House that Members should visit works in their constituencies?

Oral Answers to Questions — HORTICULTURAL INDUSTRY (MINISTERIAL RESPONSIBILITY)

Mr. Collins: asked the Prime Minister whether, in view of the difficulties which arise in the horticultural industry from the division of responsibility between the Minister of Agriculture and the Minister of Food, he will arrange for a transfer of both staff and functions so that one Minister shall be responsible for the co-ordination of home production and distribution with imports of horticultural produce.

The Prime Minister: No, Sir. I see no sufficient reason for treating horticulture differently from other branches of food production.

Mr. Collins: Does that answer mean that my right hon. Friend believes that co-ordination is now satisfactory and that the difficulties which have arisen in the past are unlikely to recur?

The Prime Minister: Arrangements have been made for very close co-operation between the two Ministries concerned.

Mr. Wilfrid Roberts: If the right hon. Gentleman will not consider it for horticulture alone, would he consider an inquiry into the desirability of making one Minister responsible for the whole of the functions of both these Ministries?

The Prime Minister: I think the hon. Member is asking a question which I answered last week.

Mr. Turton: Is the Prime Minister aware that in all parts of the House there is great concern about the lack of harmony between these two Ministers? Will the right hon. Gentleman cause an investigation to be made so that there may


be one settled horticultural policy agreed to by both Ministers?

The Prime Minister: I think the hon. Member is quite wrong. I do not think there is any such general feeling in the House. I have looked into this matter and I know that there is close co-operation between both Ministries.

Oral Answers to Questions — MARSHALL AID PLAN (TECHNICAL PUBLICATIONS)

Sir Patrick Hannon: asked the Lord President of the Council if the arrangements made under the Marshall Technical Assistance Plan for the provision of technological books and publications for the Department of Scientific and Industrial Research is now operative; and to what extent he is giving publicity to this contribution to British industrial technique and research.

The Lord President of the Council (Mr. Herbert Morrison): The supply of technical publications under the Economic Co-operation Administration Technical Assistance Programme has recently been authorised, and the first batch is now being obtained. Publicity for this arrangement in U.S.A. and in the U.K. has been given by the Information Office of the Economic Co-operation Administration Mission to the U.K. in co-operation with British news services.

Sir P. Hannon: Has the right hon. Gentleman acknowledged to the United States this benevolent act on their part to British industry?

Mr. Morrison: Yes, Sir. It is an action which I can assure the hon. Gentleman is very much appreciated, and I am sure the United States understand that.

Oral Answers to Questions — NATIONAL FINANCE

Stocks, Increased Value (Taxation)

Mr. Erroll: asked the Chancellor of the Exchequer if, since taxation of the apparent profit arising through an increase in the value of stocks held by a company increases still further the price at which these stocks are sold so as to realise a taxed sum sufficient to purchase fresh stocks at the new price, he will disregard

this profit for taxation purposes in order to give partial effect to the Government's objective that taxation of profits should not enter into industrial costs.

The Chancellor of the Exchequer (Sir Stafford Cripps): The question of the valuation of stocks for taxation purposes is a matter within the terms of reference of the Millard Tucker Committee, and I must await their report; but I may add that an increase in the value of stocks above cost does not give rise to a profit for taxation purposes until the stocks are sold. As I said in the Debate on 27th September, there is no reason why goods in the shops or in process of manufacture should be increased in price if the materials were in the producers' hands before 18th September.

Mr. Erroll: In view, nevertheless, of the first part of the Chancellor's answer, that the matter is under consideration by a special committee, will he in the meantime desist from proclaiming that taxation on profits does not enter into industrial costs as profits are at present defined?

Sir S. Cripps: No, I shall continue saying what I have said before.

American Royalties

Mr. Stokes: asked the Chancellor of the Exchequer what special provision was made by him regarding the rate at which sterling paid on account of American royalties should be transferred after devaluation.

Sir S. Cripps: None, Sir.

Mr. Stokes: Can the Chancellor give any idea of the amounts involved?

Sir S. Cripps: Perhaps my hon. Friend would put that Question down.

Mr. Stokes: But surely my right hon. and learned Friend must have taken that into consideration before deciding to do nothing?

Sir S. Cripps: My hon. Friend asked me what I had done.

National Savings Movement

Mr. Gammans: asked the Chancellor of the Exchequer what steps he proposes to take to restore incentives to investors in the National Savings Movement.

Sir S. Cripps: I rely on the National Savings Movement to explain to the public the very real incentives, both material and moral, which exist and which, properly understood, should lead to increased National Savings.

Mr. Gammans: Does the Chancellor of the Exchequer realise that by preventing people from saving money to build their own houses he has destroyed one of the chief incentives of the National Savings scheme?

Sir S. Cripps: I have done nothing to prevent anyone saving money in order to build a house.

Mr. Nally: In considering the matters involved in the Question would my right hon. and learned Friend bear in mind the desirability of providing an adequate public relations service so that speeches designed to sabotage National Savings emanating from Tory Members of Parliament and others could be adequately dealt with?

Sterling Area (Dollar Pool)

Colonel Crosthwaite-Eyre: asked the Chancellor of the Exchequer what loss to the dollar pool of the sterling area has occurred as a result of the recent negotiations between India and the United States in Washington; and whether His Majesty's Government gave their approval to the decisions involving these losses.

Sir S. Cripps: I am not aware of any losses to the sterling area dollar pool due to causes such as the hon. and gallant Member suggests. The second part of the Question does not therefore arise.

Colonel Crosthwaite-Eyre: Can that answer be taken as constituting a guarantee that all sales of manganese by India, either now or in the course of transaction or under contract for future delivery will result in a credit to the sterling area dollar pool?

Sir S. Cripps: The answer can be taken as saying what it does say.

Colonel Crosthwaite-Eyre: No, Sir. This is a very important point. There is no country which has drawn more from the sterling area dollar pool than India, and I want to ask the Chancellor for a clear answer to this; is he satisfied that

all sales of manganese from India will result in a credit to the sterling area dollar pool?

Sir S. Cripps: If the hon. and gallant Member wants an answer to that question perhaps he will put it down on the Order Paper.

Mr. Scollan: Can my right hon. and learned Friend tell the House exactly the position with regard to the large sales of sterling for dollars below the present rate from this country and what steps are being taken to stop it?

Colonel Crosthwaite-Eyre: With regard to the remark of the right hon. and learned Gentleman that perhaps I will put down a question about this on the Paper, if he will look at the Question he will see that that is exactly what I have asked—that all sales from India shall result in a credit to the sterling area dollar pool. I wish to ask him this; having made all these concessions to India is he satisfied that sales of manganese from India to America do result in a credit to the sterling area dollar pool?

Sir S. Cripps: If the hon. and gallant Member will read his Question he will see it states:
To ask … what loss to the dollar pool of the sterling area has occurred as a result of the recent negotiations between India and the United States in Washington. …
So far as I know the answer is, "None."

Colonel Crosthwaite-Eyre: In view of the way in which the Chancellor of the Exchequer has chosen to take this, I beg to give notice that I shall raise the matter on the Adjournment as soon as possible.

BUSINESS OF THE HOUSE

Mr. Kenneth Lindsay: I should like to ask the Leader of the House a Question on business about the Debate next Thursday. I think it is already apparent that a large number of hon. Members wish to speak. I have looked the matter up and discovered that we have had only two days for debates on foreign affairs during this year and one was a Supply Day. I wish to ask the Leader of the House whether he will do one of two things, either give us an extra day, Friday, or else, in the interests of tidiness—which I know appeals to him in these matters—try to separate the issues so that


a separate day is given for discussion on Strasbourg. Otherwise we are in the position that, at a generous estimate, there will be three to three-and-a-half hours for a large number of hon. Members to speak on matters affecting Germany, dismantling, Strasbourg and the Far East. That seems to me to reduce the Debate to something very near to a farce.
This is a non-party question and I would ask the Leader of the House if he will be generous and try to take this into consideration, because it affects the very important responsibilities which hon. Members are carrying regarding the question of peace and war.

The Lord President of the Council (Mr. Herbert Morrison): If I may say so, this is a rather inconvenient procedure. I made a Business statement last Thursday and I subjected myself, quite properly, to examination by the House on this matter. It is a little inconvenient if it can be raised again on every day of the week and I am bound to say that I have nothing to add to what I said last Thursday.

Mr. Clement Davies: May I ask the Lord President to reconsider this? It may be inconvenient, it may be unusual, but this Debate will have to cover a very wide area. May I add that it will include matters which are not ordinarily what we used to regard as purely Foreign Office matters. It will include economic considerations between countries. Therefore, I support the plea for further time made by the hon. Member for the Combined English Universties (Mr. K. Lindsay).

Mr. Stokes: In view of the somewhat—and I say this in a most friendly spirit—intransigent attitude which my right hon. Friend has adopted in the past and today in this matter, may I ask you, Mr. Speaker, whether it would be in Order for me to put down a Motion on the Order Paper that the Business of the House, in the interests of Private Members, be exempted at Thursday's Sitting from the provisions of the Standing Order? We can then have a vote on the subject and show the Lord President that there are a large number of us here who wish to express our opinions, and that he really is stopping us from doing so.

Mr. Speaker: Motions of that kind cannot be put down by Private Members.

Mr. Charles Williams: May I ask the right hon. Gentleman since when has his convenience come before the affairs of the House?

Mr. Crawley: Will not my right hon. Friend agree that the question of Germany and Europe, alone is at least as important as any matter now before Parliament, and will he not therefore reconsider his attitude in this matter?

Mr. Lindsay: As the right hon. Gentleman seems inclined to sit tight on this matter may I remind him that all the other Parliaments represented at Strasbourg have had Debates on this, and we shall have had no chance of debating it now until the coming year, and possibly not then. In the first year of this Parliament we had three or four two-day Debates on foreign affairs but we have had no two-day Debates on foreign affairs since last September. This is really treating the House with scant respect.

PERSONAL STATEMENT

Mr. R. S. Hudson: Mr. Speaker, with your permission I should like to make a personal statement. In the Debate on the Coal Board Report last week I quoted the case of an official who had been dismissed by the Board some months before the expiry of the 10 years after which he could have claimed compensation for dismissal. I took what steps I could to check up the accuracy of my statement, and indeed before the Debate my informant, at my request, actually obtained the name of the person concerned from official sources. The Parliamentary Secretary challenged my statement and gave supporting particulars.
As a result presumably, the "Daily Express" contained a paragraph this morning to the following effect:
If anyone based a story on Mr. Robert Hudson's account of the Cold Board manager who got the sack when he was just due for a pension he would have been accused of malicious concoction. Five hours later Hudson had nothing to say when the Minister told him his facts were entirely wrong …
After the Debate I asked the Parliamentary Secretary if he would give me the name of the person to whom he was


referring, as I wanted to make sure whether or not the cases were identical. The Parliamentary Secretary stated that he did not recollect the name of the case to which he was referring, but that he would let me know as soon as possible. He was good enough to do this and I discovered that, as I suspected, we were referring to different persons. I shall, of course, be very glad to let the hon. Member have the name of the individual to whom I was referring.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens): As the right hon. Gentleman assures the House that the case to which he made reference was not the same as the one to which I referred I must, of course, accept his assurance, but in the absence of the name of the person in question, I cannot, of course, go further.

BUSINESS OF THE HOUSE

Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. H. Morrison.]

Orders of the Day — DISTRIBUTION OF GERMAN ENEMY PROPERTY BILL

Order for Second Reading read.

3.40 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): I beg to move, "That the Bill be now read a Second time."
The purpose of this Bill is to allow German property, which during the war came into custody through the operation of the Trading with the Enemy Act, 1939, to be used towards meeting the pre-war claims of United Kingdom creditors against German debtors, as far as it will go. The property to be disposed of consists of assets in the United Kingdom which belonged to German nationals on or after 3rd September, 1939, the day when war broke out. As those who look at the interpretation Clause of the Bill will see, "Germany" means Germany as its territory was comprised on 1st March, 1938. The property, therefore, of an Austrian living in Germany either before or after the Anschluss is excluded.
Under the Trading with the Enemy Act, 1939, all this property had to be declared to custodians of enemy property and placed under their control. It was the responsibility of those custodians to preserve such property in contemplation of arrangements to be made at the conclusion of peace. The property, of course, is varied. Much of it—about £10 million sterling—is in liquid form. The rest, comprising houses, bullion, jewellery, stocks and shares, reversions, policies of insurance and the like, has not yet been realised and the value of it is, of course, what it will fetch when it comes to be sold in the open market. In advance of sale it cannot be valued with any accuracy but, including the £10 million in liquid form, the total value of all the property is estimated to be of the order of £15 million. I must emphasise that this figure is only an estimate.
These external assets of Germany, along with other similar assets in allied and other countries, form part of the reparation settlement agreed upon at Potsdam in July and August, 1945.


Under part IV of that agreement it was decided that:
The reparation claims of the United States, the United Kingdom and other countries entitled to reparations shall be met from the Western Zones and other appropriate German external assets.
In the same document, I think Articles 8 and 9, the Soviet Government at the same time renounced all claims for reparations from such assets in the United Kingdom and, of course, in other countries of the Western Allies.
The matter was carried a stage further by the agreement on reparations from Germany which was made in Paris in the early days of January, 1946, the whole text of which agreement can be found in the Treaty Series No. 56 (1947)—Command Paper 7173. Under Article 6A of that agreement it was decided that:
Each Signatory Government shall, under such procedures as it may choose, hold or dispose of German enemy assets within its jurisdiction in manners designed to preclude their return to German ownership or control and shall charge against its reparation share such assets (net of accrued taxes, liens, expenses of administration, other in rem charges against specific items, and legitimate contract claims against the German former owners of such assets).
I quoted that in full because I noticed, in the "Financial Times" this morning, the suggestion that the whole of Article 6A should, in fact, be included in the Bill. The German enemy property dealt with under this Bill is thus at the disposal of His Majesty's Government, but because of the terms of Section 7 of the Trading with the Enemy Act, 1939, legislation is necessary before it can be disposed of. There are three ways of handling these assets.

Colonel Dower: May I interrupt on a question of elucidation. If an enemy had property, and could make such a claim, could he put that forward as a claim to be dealt with among all other claims?

Mr. Glenvil Hall: He will only have a claim against his own Government or such authority as is dealing with these matters in Germany, but actual enemy property—the property of a German national in this country—has already passed under the control of the Custodian of Enemy Property and now we are proceeding to dispose of it to those who are

creditors, in one form or another, either of the German State or of German nationals.

Mr. Osbert Peake: I am sorry to interrupt on this point but, in order to get the matter quite clear, is it not a fact that certain persons who have been accepted as genuine refugees from Nazi oppression and who, in fact, possessed property here at a time when they were of German nationality, have been permitted to reclaim that property from the custodians?

Mr. Glenvil Hall: Where such cases have arisen—and I have no exact information about them—I do not doubt that in a few selected instances, where a pre-war German national has been naturalised, he will already have received such property as was for the time being in the custody of the Custodian of Enemy Property. The fact is that if there are such cases those assets would naturally not come within the assets which are being dealt with under the Bill.

Mr. Sydney Silverman: Is my right hon. Friend saying that, as this Bill is drawn, the properties to which he has just referred are not covered by it? Many of us are advised differently and, of course, if what he is saying is correct it might have some bearing on the length of the Debate.

Mr. Glenvil Hall: I did not refer to the problem; it was raised in a question put to me, and the query was, as I understood it: where a German national—that is, some one who was a German national at 3rd September, 1939—has since become, first, a refugee and then a British national, will any property belonging to him still be included in the assets to be dealt with under this Bill? I asked that question myself of those who are expert in this matter and, although they could not think of anyone to whom it might apply, they indicated that where someone had become a British subject, all the chances were that any property, if he had any, which had previously been under the control of and in the custody of the Custodian of Enemy Property, would have passed to him already and would not come in for distribution under this Bill.

Mr. Silverman: Supposing the property has not already been handed to its


original owner and is now in the hands of the Custodian of Enemy Property, will it not then be covered by the Bill?

Mr. Glenvil Hall: Yes, it will; but there is what I may call an escape Clause in the Bill. My hon. Friend will see that it is subsection (6) of Clause 1—incidentally, another of the provisions of this Bill to which the "Financial Times" called attention this morning as needing clarification. I have no doubt that such clarification will most properly be given when we reach the Committee stage.

Mr. John Foster: I am sorry to interrupt the right hon. Gentleman, and I am very grateful to him for allowing me to do so. I think that he will find, first of all, that a German national on 3rd September, 1939, was not necessarily an enemy.

Mr. S. Silverman: That is so.

Mr. Foster: Secondly, I think he will find also that he is wrong about naturalisation. Naturalisation does not give the right to recover property. There are many instances in which non-English nationals have already recovered property—as my right hon. Friend suggested just now in his question—and also cases where naturalised English people have not recovered property. I think the right hon. Gentleman will find his two answers wrong, if I may say so with great respect.

Mr. Glenvil Hall: No, I do not admit that for a moment. However I did not go on, as, perhaps, I should have done, to say that it is not essential in every case that persons should have been naturalised. The Board of Trade has had authority and has exercised it—in selected cases—on behalf of refugees from Nazi terror, and has liberated property to them in order, for one thing, to allow them to go on living without being a charge on the authorities.

Colonel Dower: We want to get this right. Would not this also include German nationals who are resident in Germany now, and not only refugees? I can give instances and names of people who are still in Germany but who have had their property in this country returned to them. [Interruption.] Oh, yes. They are not regarded as enemy aliens.

Mr. Glenvil Hall: That may very well be. I have admitted two things. The first is that property has been returned and now does not form part of the assets to be distributed. In a sense, it is quite immaterial at this juncture of our proceedings under what provision the property was returned, or what is the exact status of the individual to whom it was returned, or even, perhaps, where he happens now to be living. In some cases—there are not many—a man has been naturalised. In others provision has been made, and the property has been returned. I should like to say at this juncture that this is a very technical Measure, and I do not for one moment pretend to know the answers to all the questions that might be put to me. Perhaps, then, I may proceed.
There are three ways of handling these assets. The first is that proposed in this Bill—to apply them, as far as they will go, to meet the claims of United Kingdom pre-war creditors against German debtors in respect of obligations outstanding on 3rd September, 1939. The second is to allow those creditors who can point to the assets here of their particular German debtor to claim against those assets and then for us to take the balance remaining, if any, into the Exchequer. The third would be to pay all these assets into the Exchequer as some small offset to the burden of war costs.
Now the Government are satisfied that there are good reasons for following the first alternative, with modifications which go some way towards meeting the special case of the claims mentioned in the second. Apart from the fact, for what it is worth, that this was the method followed after the 1914–18 war, it was also the method followed in the Peace Treaties with the satellite States, Italy, Roumania, Bulgaria and Hungary, where it is provided that the assets of those countries in Allied territories can be seized and applied to meeting certain claims, which are almost entirely those of pre-war creditors.
In addition, there is also the special position of some of the pre-war creditors to consider. Among those are the holders of the Dawes and Young Loans and what are known as the standstill creditors. The Dawes and Young Loans were issued with the full support of His Majesty's


Government and the prospectus of the Young Loan said:
This issue is made with the approval of His Majesty's Government under the Hague Agreement of 20th January, 1930.
The claims of the standstill creditors arose well before Hitler began to rise to power.
Between the years 1924 and 1930 there was a considerable volume of long-term and short-term investment in Germany. The depression in 1930 and 1931, and its effects on American banks, together with the lack of confidence in Germany's budgetary position and external balance of payments at that particular time, caused a steady withdrawal of capital, mostly short-term, from Germany. Many of us have lively recollections of those days, and of how daily this drain went on. In June, 1931, the financial crisis in Germany reached such a pitch that a moratorium was declared on reparation payments—I refer, of course, to the Hoover Moratorium—and the Seven-Power Conference in London the following month recommended that steps be taken to maintain the volume of credits already extended to Germany.
In support of those recommendations, with which His Majesty's Government of the day were closely associated, the Treasury requested the Governor of the Bank of England to do what was possible to secure the co-operation of the banks and others concerned. This was done, and the result was that an agreement was reached known as the Standstill Agreement, which secured that those German credits, so far as United Kingdom creditors were concerned, were thus maintained when, but for the Government's intervention, they might have been withdrawn. I mention these facts to show that there is an obligation to those creditors.
The great bulk of the claims, therefore, either date back to contractual obligations entered into with Germans or the German State prior to the rise of Hitler to power in Germany—mainly at the time of the Weimar Republic—or relate to normal trading transactions cut short by the outbreak of the war. This being the position, the most equitable course to follow in dealing with those assets was, it seemed to us, for us to use them, so far as they will go, to meet claims of the pre-war creditors, which, incidentally, will include

claims in respect of His Majesty's Government's guarantees of certain Austrian Loans—and I have no doubt that that point will arise, but I will not elaborate upon it now—for the reason that we do feel that those loans should come into the picture.
The dividend will be small; but how small cannot yet be indicated because an exact figure is not yet available of the total of the claims. There were voluntary registrations of claims during the war, and in January last there were further registrations of claims against particular assets. On the basis of this and other information in the possession of the Government the present estimate of them is £120 million. It may, of course, be only £100 million or even less. We cannot say. I want to emphasise that even £120 million may not cover the claims that may be put in. However, so far as we can estimate what the claims may amount to, we put it at something between £100 million and £120 million.

Mr. Peake: On a point of elucidation. Could the right hon. Gentleman tell us how much of this £120 million represents the claims of the Government, as mentioned in the Financial Memorandum of the Bill, with respect to the guarantees of the loans to which the right hon. Gentleman has referred?

Mr. Glenvil Hall: I am sorry. I tried to break the figure down, but at the moment it is quite impossible to give any figure upon which the House could rely, and I should hate—and I am sure the House would hate me to do so—to guess at it, because thus a figure might get into circulation that was not accurate. If it is possible to give a close estimate of that figure I shall gladly try to do so in order to meet the wish of the right hon. Gentleman.

Mr. Peake: I do not want to embarrass the right hon. Gentleman, but I should have thought the Government would have known the amount of their own claims.

Mr. Glenvil Hall: I am told it is fairly small, but the exact figure I could not give. I repeat that if I can give an estimate to meet the wishes of the right hon. Gentleman during the Debate, I shall gladly do so. I have been advised to keep off any attempt to break this amount down because, in many directions, our information is somewhat scanty at the moment.
The main proposal in the Bill is that claims by British persons with debts against Germany based on contractual obligations which existed on 3rd September, 1939, covering transactions connected with business carried on in the United Kingdom, may be considered as a basis for sharing in the distribution of Germany enemy property. This would allow any British subject carrying on business in the United Kingdom to claim in respect of that business, but would not allow a claim in respect of a debt arising through a contract with a German made in respect of his business in some other country, for example, in the U.S.A. or Holland.
Claims will lie against the German assets as well as against persons or firms in Germany. Claims will also be admissible from British holders of Austrian Government bonds, payments of which were covered by the Anglo-German Transfer Agreement of July, 1938. It would not be right, in our view, to expect the Austrian Government to be responsible for these loans during the war years, and, therefore, claims based on such loans should be included in any scheme of distribution of German enemy property. The Bill also covers, as I have already indicated, claims of British holders of Dawes and Young Loans for which provision for payment was also made in the Anglo-German Transfer Agreement.
The Bill provides for the appointment of an administrator by the President of the Board of Trade, who will be clothed with the necessary powers by Order in Council to make distribution in manners to be prescribed. The administrator, as has been already announced, will be assisted by an advisory committee which it is proposed to appoint, composed of representatives of the various classes of creditors concerned, who would be asked to advise on such matters as the classes of debt which should rank for payment, what priorities, if any, should be established, and on any other matters upon which their advice can be usefully secured before the Order or Orders in Council are drafted. I hope that when the various creditor interests meet, they themselves will settle whatever differences there may be between them, and provide a scheme which will have their support.
It is proposed that there shall be a general pool of assets against which the

claims shall be made. There is, however, provision in the Bill in Clause 1 (4, c) under which any scheme of distribution can allow a choice to be given to those creditors who, but for the war and the operation of the Trading with the Enemy Act, would have been able to claim against assets in the United Kingdom of their own particular debtor.
When the treatment of German assets was previously debated in the House on 20th January this year, the question was raised whether those creditors whose debtors possess assets in this country should be allowed to obtain such satisfaction as they could out of the assets of their prospective debtors held by the Custodian. It was argued, in particular, from the other side of the House, that some national advantage might be gained in allowing these creditors to claim against the assets of their debtors, since under the Paris Agreement on Reparation those recoveries of contract claims against the particular assets of the creditor's German debtor do not, in certain circumstances, rank against our share of reparation. We might thus become entitled to more of other forms of reparation. It was, so far as it went, I think, a very real argument. The extent to which this benefit is likely to be realised in practice is, however, a matter of some doubt owing to the intricacy of the accounting arrangements.
Clause 1 (4, c) of the Bill will make it possible for these creditors to exercise a choice between (a) making a preferential claim against their debtor's assets and no more, or (b) waiving such a claim and standing in with the rest of the creditors in claiming against the general pool. The creditor will presumably be in the best position to judge where his best interest lies, and whether he should exercise the option to which I have just referred.
I have seen some articles in the Press which suggest that the information given on this matter up to now is not explicit enough for creditors to form an opinion whether they should pursue their claim against the proceeds of the property formerly owned by their debtor or stand in with other British creditors of the German proceeds of German property in the United Kingdom. The Custodian of Enemy Property will do his best to give such information as he can to persons claiming against


the assets of specific debtors in order to help them to choose rightly between any options which an Order in Council may give them. It will be necessary for such creditors to give the custodian adequate information to enable him, in his turn, to identify the assets against which they propose to claim.

Mr. Scollan: This is a very interesting point. Does that mean that certain creditors in this country who know that the people whom they were dealing with in Germany had very large bank balances to their credit in this country can make a claim direct on the balances that are here; and another creditor who does not know whether the people who owe him his bill have any real assets worth speaking about in this count-try can make an application on the pool? Does that mean that the Bill is setting up a pool for the one and direct payment for the other?

Mr. Glenvil Hall: It means, as I said, that where a creditor here has a claim against assets which he can trace in this country belonging to a German debtor, he will have the option of pursuing his claim against those particular assets as such, or he can, if he is so minded, take his chance in the pool. It may well be that a creditor in that position may not know whether someone else has an even prior claim against the particular assets which he thought were hypothecated to himself. It will be for him to judge. As I indicated—and what my hon. Friend said just now by way of question underlines it—a creditor here will have that right if he so desires to use it to make his claim against a particular asset and not against the pool as such. I would emphasise, however, that he will not be able to pursue his debtor in this direct manner and then for any balance which may be due to him proceed also against the pool. He has to opt for one or other of these particular courses.

Mr. Walter Fletcher: The right hon. Gentleman used the expression "hypothecated to him." Previously he had been talking about assets lying at a bank or somewhere else. Would he make it clear if the position is the same where it is an asset not hypothecated directly to the man who lent the money but of whose existence he knows somewhere else, because there is a considerable difference?

Mr. Glenvil Hall: I perhaps used the wrong word when I said "hypothecated." A United Kingdom national might have been doing business with a German national about whom he knew nothing and whom he might have considered as a man of straw, and the undertaking between the two may have been that the German national should deposit here certain securities. Although they were not in the possession of the United Kingdom creditor, nevertheless, by some method—an exchange of letters or even perhaps something more direct—the creditor here was given in certain circumstances the right to take certain of those assets which had been deposited. In a case like that, the creditor here would be able to proceed against the specific assets which he knew were here when war broke out and which had been transferred under the Trading with the Enemy Act, 1939, to the Custodian. I meant no more than that when I talked of certain securities being hypothecated.

Mr. Drayson: Will the Board of Trade administrator be empowered to inform a creditor whether there are other creditors of the same German debtor who have a lien on whatever assets might be lodged in this country?

Mr. Glenvil Hall: That, of course, is a matter of detail. I have already said that the Custodian of Enemy Property will be prepared to help individuals to make up their minds whether to proceed against the assets of a given debtor here or to take their chance in the pool, and I should imagine that information such as that would, if known to the Custodian, be given to anybody before coming to a decision.
I should make it clear that the Bill does not provide for the distribution of German enemy property in colonial or other overseas territories over which His Majesty exercises jurisdiction. This will be a matter for consideration, and if necessary separate legislation, by the territories concerned. Perhaps we can return to that later in Committee.
Recoveries will, as I have said, be small. Some creditors will in the past have been given a bad debts' allowance for taxation purposes, usually on a provisional basis, in respect of the claims upon which a dividend is received under this Bill. Legislation will therefore be


necessary to ensure that the sum now to be received is related back for taxation purposes to the period for which the allowance was given, and it is proposed to include a provision to this effect in the next Finance Bill. The proposed legislation will also cover debts from other enemy and enemy-occupied territories.
The fact that German enemy property is distributed in the manner proposed will not, apart from the direct effect upon debtor-creditor relationships—where creditors' claims are met out of the particular assets of their debtors—affect any claim which the former German owner may have under any scheme of compensation which may ultimately be adopted in Germany. That is to say, so far as we are concerned, the German debtor will continue to have his right kept alive against his own Government if any scheme there is adopted which gives compensation for loss of assets in overseas countries. His position will be the same as if his property was taken into the Exchequer—that is, taken over by the Government. Private debtors whose debts have been reduced under the general distribution may well have to make some internal adjustment with the German authorities under any scheme of compensation which the latter may adopt. As only a small part of creditor claims will be met there should be large balances outstanding, the right of settlement to which as between creditor and debtor will remain unimpaired. That is to say, the creditor's contract claim against his German debtor will still subsist, apart of course from anything he has received under any settlement come to as a result of this Bill.
This Bill does not, as I know hon. Members opposite have noticed, lay down a detailed plan for the distribution of assets. It is only, broadly speaking, an enabling Measure to permit machinery to be set up for this purpose, leaving the operative details to be promulgated by Orders in Council. The adoption of this method has, I freely confess, not been followed without considerable discussion and reflection. Its acceptance is based on the knowledge that before any scheme of distribution can be worked out a great deal more information is required than we at present possess.
Further, it will be necessary to have the advice of the Advisory Committee

before some of the difficult problems of the scheme can be resolved. Consequently, it is for this reason that the Bill calls for powers to proceed by Orders in Council, which will of course be subject to a negative Resolution of this House. Provision will need to be made, for example, for the manner and time in which claims are to be made, the determination of whether a claim is in fact established, priorities, and the order in which payments shall be made, and the admission of claims against particular assets, to which I have referred.
The Bill is largely an enabling Measure. Its provisions are somewhat technical in character, and no doubt a number of points will arise as a result of this fact. I notice that a series of queries has been brought to our notice in the columns of the "Financial Times" this morning. There are, I would observe in passing, good answers to all of these, some of which will undoubtedly be given by my hon. Friend the Secretary for Overseas Trade when he replies to the Debate tonight. Others will perhaps be left till the Committee stage. Therefore, unless the House so desires it, I do not propose this afternoon to take the Bill, short though it is, Clause by Clause. All I will do in conclusion is to commend the Bill to the House as a Measure which will do as much justice as it is possible to do to those who have claims against German property at this time.

Mr. S. Silverman: Is it proposed that the Committee stage shall be taken upstairs or on the Floor of the House?

Mr. Glenvil Hall: That is a question which would be more properly addressed to my right hon. Friend the Leader of the House, but I will find out the answer before the evening is out. My impression is that, from the nature of the Bill, it should be taken on the Floor of the House.

4.17 p.m.

Mr. Osbert Peake: This is a Bill which I am sure we can discuss on non-party lines. It deals with a highly complex and intricate subject, as anybody who listened to the right hon. Gentleman's opening statement will realise. However, I should like straight away to enter, not in any spirit of enmity towards the right hon. Gentleman, my protest against the hopelessly inadequate


time we have been allowed between the presentation of the Bill and the taking of its Second Reading. After all, it is nearly four years since the Paris Agreement upon Reparations was arrived at. That agreement is the parent of this Bill, but while the Agreement was made four years ago we have had scarcely four working days between the presentation of this Bill and its Second Reading.
Moreover, up till now we have had very little of the essential background information made available to us upon which we could form a view about this Measure. It is only in the opening statement which the right hon. Gentleman has now given us that we have been furnished with a great deal more information than we previously possessed, and we should like considerable time to study his statement and that information before we come to the Committee stage.
I echo the appeal of the hon. Member for Nelson and Come (Mr. S. Silverman) that this Bill be taken in Committee of the Whole House. I would also strongly appeal for a reasonable time—at least 10 days in my view—before we come to the Committee stage, to give us time to examine the statement the right hon. Gentleman has made, and also the further information which I hope we shall get from the Secretary for Overseas Trade tonight, to enable us to deal intelligently with the Bill in Committee.
We know today for the first time the approximate extent of the ex-German property now in the hands of the Custodian, which we are told is £15 million, and that the extent of claims is anticipated to total no less than £120 million, which means that if there were an all round pro rata distribution, there would be a dividend Of only 2s. 6d. in the pound. I must echo the surprise I voiced during the right hon. Gentleman's speech, that he cannot tell us what is the extent of the claim, included in this £120 million, put forward on behalf of His Majesty's Government.

Mr. Glenvil Hall: I apologise once again for not having the figure when I made my speech, but I have now discovered it is between £3 million and £4 million.

Mr. Peake: I am much obliged to the right hon. Gentleman. I am not at all

sure that, when we come to examine that further, we shall find that it is equitable for the Government to include their claim, in respect of guarantees given for certain Austrian loans, among the claims put forward by ordinary traders and people who invested in the Dawes and Young Loans that were floated at the instance of the Labour Government in 1931.

Mr. Glenvil Hall: The Dawes Loan was 1924, and the Young Loan was 1930.

Mr. Peake: This Bill deals only with a very limited facet of the whole question of reparations, which was the subject of the Paris Agreement. I think it is necessary in discussing this Bill that hon. Members should appreciate what the Paris Agreement laid down. It was an agreement among all members of the United Nations, except the U.S.S.R., that reparations should be divided in agreed percentages. It states that German reparations
shall be divided into the following categories:
Category A, which shall include all forms of German reparation except those included in Category B;
Category B, which shall include industrial and other capital equipment removed from Germany, and merchant ships and inland water transport.
A table of percentages is then given, ranging from 0.05 per cent. of Category A in respect of Albania to 28 per cent. to be granted apiece to the United States and the United Kingdom.
When we come to Article 2, we see that the signatory Governments
agree among themselves that their respective shares of reparation, as determined by the present Agreement, shall be regarded by each of them as covering all its claims and those of its nationals against the former German Government … arising out of the war.
The important Article, from the point of view of this Bill, is Article 6A, which the right hon. Gentleman read to the House. It is important to understand the full significance of this Article, which states:
Each signatory Government shall, under such procedures as it may choose, hold or dispose of German enemy assets within its jurisdiction in manners designed to preclude their return to German ownership or control, and shall charge against its reparation share such assets (net of accrued taxes, liens, expenses of administration, other in rem charges against specific items and legitimate contract claims against the German former owners of such assets).


It would appear that, broadly speaking, that the amount of enemy property sequestrated by each of the signatory countries shall rank against any amount which that country may subsequently become entitled to under the percentages agreed to in Article 1. It is important however to note the words, that the assets which are to go to diminish our ultimate share of reparations exclude assets
net of accrued taxes, liens, expenses of administration, other in rem charges against specific items and legitimate contract claims against the German former owners of such assets.
As I understand it, that means that if the Government now permit specific claims to be made by individuals against specific items of German property here, our 28 per cent. of any sum ultimately agreed upon by a peace treaty as reparations due from Western Germany will not be pro tanto diminished by such sum.
It seems to make a very important difference from the point of view of our national interest—that is, how much we shall eventually receive as a nation—whether the Government proceed by means of a general distribution pro rata to everyone, or whether they admit specific claims against specific assets. That seems to be of vital importance from our national point of view, and it also seems, on the face of it, to be a more equitable procedure, for the reason that if one lends or advances money or is owed money, without security, one is not in such a good position as a person who has taken the trouble to find out whether there is security and property available against which distraint or attachment can be exercised. As a matter of equity, it seems to me that where there is a claimant here with claims upon a German national who had property here at the outbreak of war, his claim is better than the claimant without security or property which could have been attached. As a matter of equity, he has a stronger claim.
There is also the point that our national interests will be greatly advantaged if the claims are dealt with in this way.

Mr. Cecil Poole: If such claims are met out of the assets of German nationals here, will it not reduce our total claim for reparations to that extent?

Mr. Peake: No, Sir.

Mr. Poole: That is how I read Article 6.

Mr. Peake: If the hon. Member examines the statement made by the Financial Secretary on 2nd November and also the statement of the Economic Secretary on 20th January, he will clearly see that, from the point of view of our national interest, we are likely to obtain more if specific claims are admitted against specific assets. The right hon. Gentleman also went on to say today that the benefit which would accrue to us was not estimated now to be so great as it was some months ago. I take it that he thinks the prospect of ever obtaining anything for this country under the Paris Agreement as our share of reparations is slighter today than it was estimated to be in the past. I should welcome some statement from the Secretary for Overseas Trade on the general question of whether he thinks we are likely to receive anything at all under the Paris Agreement.

Mr. Scollan: I should like to ask the right hon. Gentleman a question.

Mr. Peake: This is such a complicated question I would rather the hon. Gentleman did not. I would make a much more sensible speech if he did not interrupt me. He will no doubt have his chance to speak later on.

Mr. Scollan: I just wanted the right hon. Gentleman to clear up one point.

Mr. Peake: I would much rather that the hon. Gentleman put his questions on this subject not to me, but to the Government who have introduced the Bill.
There are a number of points which still need clearing up. We shall study with care the speech made by the right hon. Gentleman this afternoon in the hope of finding some light thrown upon them. I attended closely to what he said, and I am still in a fog—as, indeed, we must all be today—regarding the answers to the very pertinent questions which are to be found in the column of the City Editor of "The Times" on Wednesday of last week. That column put the thing more clearly than I can, and I will quote from it:


It is uncertain whether, in a case where the custodian holds assets in this country of a German undertaking which owes money to a British creditor, the latter will be given the choice of taking the sequestrated assets in final settlement or of taking his chance in the general share-out.
As I understand the right hon. Gentleman's statement, he proposes to give an option, and moreover, he proposes that the Custodian should furnish information to claimants to enable them to have some idea whether to exercise their option or not. I suppose he means that if the Custodian is prepared to give information to individuals to assist them in their claim, he would equally be prepared to publish this list of assets if necessary, so that the same information may be available to everyone. To me it would hardly seem right that somebody who had a claim, which might be rather a bad claim, should be entitled to receive information which is not available to the public at large.

Mr. Glenvil Hall: My hon. Friend the Secretary to the Overseas Trade will answer many points when he comes to reply, but this question has been raised many times, and I ought to reply to it now. It would be quite unrealistic to ask either the Advisory Committee or the Custodian of Enemy Property to publish lists of assets. They run into numerous folios and are given item by item. It would be an incredible thing to do. Information given both to the individual and to the Advisory Committee is another thing, but the long lists of German assets in this country are more or less an estimate of what they may or may not be worth, and ought not to be asked for and certainly not published.

Mr. Peake: I should like to consider the right hon. Gentleman's reply, and I am much obliged to him for making it. This procedure of published lists has been followed in the United States, and there is, therefore, a precedent for doing it.
The second question which was in the City columns of "The Times" was this:
This raises all sorts of questions of the priority of claims according as to whether they are secured or not. Ostensibly it would seem that a secured creditor of a German firm, if he takes the first alternative and finds that he receives only a tiny portion of his claim, is precluded from claiming for the balance of his debt.
I should like to know whether it is only secured creditors who can make claims

against specific items of property, or is it other creditors, who knew or may be taken to have information that their German debtor was possessed of assets in this country?
The third issue raised in the City column of "The Times" is the question—
whether a large firm—a bank, say—having several claims may choose between the two alternatives for each one of its claims, or whether it must choose between one or the other course for all its claims.
I hope we shall have an answer to that question when the hon. Gentleman comes to close our Debate tonight on this Bill.
On the Bill itself there are one or two points I should like to put, and the first relates to Clause 1 (4) to which the right hon. Gentleman has already referred. In that subsection an Order in Council may:
exclude from the application of the Order such classes of claims as may be prescribed by the Order.
Apparently, it is contemplated that the Order in Council itself, which establishes all the machinery for the operation of making claims and of distributing assets, shall itself exclude from the application of the Order such classes of claims as may be prescribed. I should like to know what classes of claims it is contemplated can be altogether excluded. I can well understand that a debt, which was not enforceable at law—a gambling debt or a debt for immoral purposes—might be excluded, but I cannot at this moment conceive of any trading debt or other legitimate debt enforceable in law which ought to be excluded altogether.
Clause 1 (4, b) clearly raises problems of the greatest difficulty. It says:
An Order in Council may … differentiate between different classes of claims, as respects the priority in which payments are to be made and the extent of the payments;
Questions of the very greatest difficulty are going to arise there. What are the relative merits of the different classes of claim? The right hon. Gentleman was wise to have armed himself in this regard with the Advisory Committee to which he referred in his Written Answer on 2nd November when he said:
It is my intention to appoint a representative Advisory Committee before the scheme comes fully into operation to advise the Administrator generally on the classes of debts to rank for payment, the scheme of division, what priorities, if any, should be established,


and any other matters of a like kind on which the Administrator considers their advice might be useful."—[OFFICIAL REPORT, 2nd November, 1949; Vol. 469, c. 58.]
I should have thought it was very essential that this Advisory Committee should tender advice to the Administrator before the Order in Council is finally settled, because it contemplates that the Order in Council may not only appoint the Administrator, but it may go on to exclude certain classes of claims as well as differentiate between them. I should like an assurance that we shall have this Advisory Committee in being and tendering advice before the Order in Council is made, which makes provision for the matters under Clause 1 (4).
Almost the last point I have to make is in regard to a tribunal. After the Treaty of Versailles, tribunals were established, called Mixed Arbitral Tribunals, and the hon. Member for Nelson and Colne (Mr. S. Silverman) and other hon. Members who are versed in the law are fairly familiar with the fact that before them a contested claim could be challenged. If we look at what the Bill proposes, it is by no means clear whether there is to be a tribunal or not. I attach the very greatest importance to there being a tribunal.

Mr. S. Silverman: The right hon. Gentleman may or may not know that the Custodian of Enemy Property now, in the administration of similar matters arising from Hungarian, Roumanian and other claims, proceeds without any tribunal, but lays down his own rules to guide his own discretion. Then he does not always keep to those rules.

Mr. Peake: I am very much obliged to the hon. Member. I think I can see that in this matter he is on my side. That is a very rare occurrence, and I must confess that it makes me a little nervous. If we look at Clause 1 (2) we shall see that the Order in Council may make provision for the following matters—and we turn to paragraph (d)—
the determination, as respects any such claim, of the question whether the claim is established for the purposes of the order and of the amount of the claim.
I should have thought that as a mere matter of ordinary common sense and justice there should be a tribunal before which disputed claims could be taken for settlement. I should like to know, therefore,

whether it is proposed that the Order in Council itself will make provision for a tribunal, either to hear claims or to hear appeals against adverse decisions of the Administrator.
Finally, I should like to know in a little more detail than we had from the Financial Secretary the prospects for those creditors, over and above the miserably small amount of their claims which they are likely to receive, on the average, according to the provision of the Bill. The average dividend, it appears, will be 2s. 6d. in the £. That means that many people will receive much less than the 2s. 6d. in the £ upon perfectly genuine and bona fide transactions. What prospects have they of receiving something further, if and when a final reparations settlement is reached? We learned a lot after 1918 of the evil consequences upon the economy of Europe of excessive and indeterminate reparations claims, but I should like to know whether there are prospects of any finality being reached under the Reparation Agreement, and if, when that happens, it is the intention of the Government to give any consideration whatever to the claims these persons will have for the other 17s. 6d. in the £, of which they will be short, after the proceedings contemplated in the Bill have been completed.
Of course, the community as a whole has suffered by German aggression, and it would be quite right that the bulk of any reparations payments should go into the Exchequer. It seems to me that these people have suffered what lawyers call special damage. They have been conducting the perfectly normal operations of trade and finance such as are essential to a community which depends upon international commerce for the lifeblood of its existence. I should like to have some assurance from the Government that they would intend, having distributed, let us say, an average of 2s. 6d. in the £ to people with genuine claims, that the people may have some hope of getting something further when an ultimate reparations settlement is reached.

4.45 p.m.

Mr. Sydney Silverman: In view of one remark made in passing by the right hon. Member for North Leeds (Mr. Peake), it seems that I ought to apologise to him for occasioning


him anxiety or discomfort because of my alliance with him in today's Debate. To see how far the alliance may proceed, we must wait until another stage of the Bill. In the meantime, it may be some comfort to him to know that we are not discussing a subject today with which the differences of party politics have much to do. We are discussing how best to deal equitably with a series of difficult and highly complicated questions.
I confess to having some sympathy with the complaint which the right hon. Gentleman made about the long time that is required to discuss these matters. They are highly complicated, and they require fairly detailed knowledge of a complicated international background. It is a little difficult to do justice to them without having a day or two's time to consider them, especially when the Bill in which the Government proposals are embodied is, as it was correctly described by the Financial Secretary to the Treasury, an enabling Bill. The Bill gives very little positive or specific information about how matters will be dealt with in practice. Most of them will be dealt with under Orders in Council which no doubt we shall have the right to see and to challenge. Until we know what is in them, it is difficult to make any final or abiding opinion.
It may be that the Government thought that this was only a small amount. One knows what pressure there has been on the time of the House and how it accelerates and increases. The Government may therefore have thought that this was a matter which the House might be content to leave to them and to their expert advisers at the Board of Trade and the Treasury. I feel sure that that would be the wrong view, and that these matters ought to be determined by the House and that the House ought to have proper time to discuss them.
After all, what is the basis of all this? It is an old custom, and no one would seek to challenge it now, that when war breaks out between two States each State feels itself entitled to confiscate the property of the nationals of the other State, leaving anyone aggrieved by that State confiscation to his remedy against his own Government in his own country. As a matter of broad principle, there is no exception that anyone would

wish to take to that procedure. The war which concluded four and a half years ago had many differences from previous wars. It was not simply a conflict between territorial Powers. It was a conflict of ideas even more than a conflict of persons or of States. We had in that conflict allies in the States with which we were at war, and it has never been part of our principle that we should confiscate the property of our allies.
There was a large number of persons who were inevitably not on the side of the enemy country but on the side of this country and our allied countries. Many of those people had, long before the war, and for months after the war, been deprived by the State in question of their citizenship. There were therefore large numbers of people who were born citizens of an enemy Power and who were deprived by the action of that Power of the compensating right to look for relief against their own Government in respect of any property of theirs which was confiscated in this country. I can find only one rather obscure passage in the Bill which has anything to do with making any such exception, and even that is vague, inconclusive and not specifically directed to this issue. It is to be found in Clause 1 (6), which says:
Notwithstanding anything in this section, the Board of Trade may give a direction to the administrator requiring him to transfer to or for the benefit of any person specified in the direction any German enemy property or the proceeds of any German enemy property, to which that person would have been entitled but for the operation of the Trading with the Enemy Act, 1939, or any order made thereunder, and the administrator shall comply with any such direction.
Under that Clause there is, therefore, power in the Board of Trade to exempt a particular asset. There is nothing in the Bill to show to what kinds of case that applies, whether there are to be any rules about it or whether the discretion of the Board of Trade is to be what is called a judicial discretion as apart from mere caprice, or how the Board of Trade is to reach its opinion, and in that the Bill does much less than justice to the known intentions of the Government. I do not see why the Bill should be so drafted as to make that a purely discretionary or arbitrary caprice when the Government have already bound themselves voluntarily to apply the proper principles by


the international arrangement they made in the Paris Agreement.
Under that Agreement, an assembly drafted and accepted a set of rules of accounting to which His Majesty's Government are a party, and under those rules of accounting the proper exceptions are directed to be made, and I cannot believe that the Government do not intend in their activities under the Bill to give full effect to the principles to which they have already made themselves a party in the Agreement and under those rules. I cannot conceive why that should not be put specifically in the Bill so that everybody shall know what his rights are and what things the Government are proposing to do about it.
We are not without all guidance. I should like, first, to draw attention to what is being done in other countries under the same Agreement and what we are doing under that Agreement with regard to assets of the same kind now in our hands. The United States of America make it quite clear. They do it very simply and very fully. They have two statutes on the subject, Public Laws 322 and 671, which are amendments to Section 32 of the American Trading with the Enemy Act. According to their way of looking at it, the assets of victims of Nazi persecution are to be released either if these victims were deprived of their liberty or if they did not enjoy full rights of citizens since the outbreak of the war.
Both those things were derived from the rules of accounting made under the Agreement to which reference has repeatedly been made. It should be noted very particularly that the Americans have done it on principles of broad generosity. They have not sought to whittle it away by all kinds of technical limitations or rather narrow or narrow-minded exceptions. Nor have they made the requirements cumulative; they are alternative requirements. The first is that if one can prove that one was deprived of one's liberty by the Nazis on racial, religious or political grounds, that is enough to exempt one's property from confiscation as enemy property. Why should it not be enough? Then if one cannot prove that but can prove that, without being deprived of one's liberty or without even being deprived in the full sense of one's nationality, one did not enjoy full rights of

citizenship on these grounds, that is enough, too.
Again, why should not that be enough? As we have seen, the very ground on which one is entitled to confiscate somebody's property is that he is a full citizen of another country and can rightly and safely look to the Government of that country to redress him or compensate him for the property he has lost. We do not quite do that.

Mr. Ellis Smith: What is my hon. Friend quoting?

Mr. Silverman: I am quoting some notes which I have prepared and extracted from the agreement.

Mr. Ellis Smith: They are on the other side of the House, too.

Mr. Silverman: One takes precautions to see that knowledge is widely diffused. There is no harm in that, I hope, in Parliamentary practice. However, the facts must be taken—I am sure my hon. Friend the Member for Stoke (Mr. Ellis Smith) will so take them—on their own merits and not in a prejudiced way according to whoever happens to be reading them at the moment.
I have given the American practice. We have acknowledged ourselves to be bound by the same rules, and we have had the advantage of knowing how the Custodian of Enemy Property in this country has interpreted the same obligations which the Americans have interpreted so widely. I am quoting a letter from the Administration of Enemy Property Department (Trading with the Enemy Department) which is apparently a joint Department of the Treasury and the Board of Trade. It says:
As regards claimants in the first category … the Board of Trade will require to be satisfied—.
"The first category" means people who have been deprived of their liberty on racial or religious grounds. The first thing which disappears from our interpretation is the ground of political persecution. That is very wrong. A great many people who were, of themselves, in no danger on racial or religious grounds incurred very great peril by assisting others who were in danger on racial or religious grounds, and there is no reason why they should be deprived of protection which other countries feel themselves bound to give. However:


As regards claimants in the first category … the Board of Trade will require to be satisfied that the applicant (i) was deprived of liberty pursuant to any law, decree or regulation which discriminated against any religious or racial groups or organisations, and (ii) did not enjoy full rights of citizenship of the enemy country of his residence at any time between 1st September, 1939, and the abrogation of such law, decree or regulations, and (iii) has left that country, or intends to leave there within a reasonable time … and (iv) was not disloyal to the Allied cause during the war, and (v) has a case which merits favourable consideration.
I should have thought that if he managed to prove conditions (i), (ii), (iii), and (iv), he might be exempted from (v) and have a case which merited favourable consideration. Notice the difference that has crept in here between our practice and the American practice. Whereas the American practice required proof of one or other of two serious matters in the alternative, we require cumulatively five conditions to be satisfied even in the case of those claimants. Even that does not tell anything like the whole story—

Mr. Foster: I have not Section 32 of the American Act here, but I seem to remember that in that Section the claimant also has to prove loyalty. I do not think the hon. Gentleman means that if somebody did not enjoy free rights of citizenship but was loyal to the Allied cause, he could not recover his property. The hon. Gentleman will notice that the law is an amendment of Section 32, and not a substitution for it.

Mr. Silverman: I have not the whole Section either, but I am prepared to accept what the hon. Gentleman says. After all, the basis was that it was a Trading With the Enemy Act both in the United States of America and in this country, and the first thing one has to do is to prove that one is not an enemy, and that one has not been acting at any relevant period in a hostile sense. If the hon. Gentleman says that is specifically part of the American law, I do not doubt it.

Mr. Foster: But it is a little unfair to the Custodian to say that he requires five conditions and the Americans only one alternatively, because one of the five conditions required by the Custodian is that the person should not be disloyal to the Allied cause, and that is one of the conditions required by Section 32 of the American Act.

Mr. Silverman: I am prepared to amend what I have said and to say that instead of the Americans requiring one and we five, they require two and we four, one of them being a matter which would be common ground. I would not complain that the Governments concerned should either take it for granted or make it a specific part of the law. Obviously it must be an essential element in any claim of this kind that the claimant was on our side during the war. If he cannot prove that, he cannot take himself out of the ambit of trading with the enemy operations.
I was saying that even that is not the whole of the story because, having in this way laid down the rules on which he would exercise his discretion in these matters, I am afraid that in some cases which have been drawn to my notice the most narrow and unsympathetic interpretations of those rules have been allowed to operate to such a degree that one wonders what was the object of interpreting them in such a fashion.
I feel sure that there is not a large amount of money involved. My right hon. Friend has said that the total assets with which this Bill may ultimately have to deal will be about £15 million, and that our own claims amount to perhaps £4 million or £5 million. I do not think any exact estimate has been made, but the best one I have been able to make of the amount which is affected by the kind of claims I have in mind is that it might be about half a million pounds. So it cannot be the amount of money that is worrying the Custodian in making these questionable interpretations of his own rules.
I should like to give examples of one or two. The Custodian begins by saying that one must be deprived of one's liberty pursuant to any law, decree or regulation. In one case a man was deprived of his liberty by the Iron Guards in Roumania—it will be remembered that for the purposes of this Bill all enemy-occupied territory is affected by its scope. This was at a time when the Iron Guards were being used as a secondary police force by that Government. The Custodian of Enemy Property made his own inquiries. We do not know from whom, we do not know what information he obtained, we do not know what evidence he had, we do not know on what basis he reached


his conclusion. But the somewhat surprising conclusion that he reached was that this person had not been deprived of his liberty pursuant to any law, decree or regulation which discriminated against Jews or racial groups because the Iron Guards were then in a state of revolt against the Government of the country. If it has any relevance at all, that is a point of fact which can be determined, but there is no tribunal, there is no hearing, there is no disclosure of information, and there is no opportunity to prove to the satisfaction of the Custodian that, so far from being in revolt, they were the willing and enthusiastic instruments of that Government in pursuing a discriminatory policy.
That was one thing. Then the Custodian came to another conclusion. He said of the notorious camp in Transdnistria in Roumania that it was a labour camp, not a concentration camp. Of course, everybody knows there was hardly anybody there except Jews. Of course, everybody knows that hardly anybody ever came out of it alive except such as, in the later stages, were transferred to Auschwitz from which they certainly never came out alive. We know all that, but the Custodian holds that it was not a concentration camp, it was only a labour camp, and that he cannot find any decree which says that only Jews shall go there. The survivor of these horrors, with a pitiful remnant of property got out in some manner under the most difficult and dangerous circumstances, and now in this country, is deprived of the use of it because Transdnistria and Auschwitz were regarded by the Custodian of Enemy Property as labour camps and the inmates were not deprived of their liberty. That is a surprising conclusion.
Then there was the case of a man and woman in Hamburg. The man was taken to a concentration camp and was never heard of again. His wife had a notice of deportation served upon her for transport to Eastern Europe.

Mr. C. Poole: Of what year is the hon. Member talking?

Mr. Silverman: Of 1941 or 1942.

Mr. Poole: These, then, were events which occurred during the war?

Mr. Silverman: Certainly.

Mr. Mitchison: On a point of Order, Mr. Deputy-Speaker. I am genuinely puzzled about where we are getting to. My hon. Friend is talking about unfortunate occurrences in 1941 to some particular lady who was transported somewhere. The Bill appears to be dealing with the distribution of German enemy property and merely to involve the setting up of certain machinery for that purpose.

Mr. Deputy-Speaker (Mr. Bowles): I think I have understood the argument of the hon. Member for Nelson and Colne (Mr. S. Silverman). He is saying that the Bill does not contain the discrimination amongst the people who are to be paid out which he thinks it should contain. He mentioned also the case of the American legislation. I think this is quite relevant to the argument.

Mr. Silverman: I am much obliged to you, Mr. Deputy-Speaker and, if I might be allowed to say so to my hon. and learned Friend the Member for Kettering (Mr. Mitchison), I have tried to follow a careful argument, although I do not think it would be right to inflict repetition of the argument upon the House merely to satisfy my hon. and learned Friend that my point is relevant.
Let me return to the point. That lady, being served with a notice of deportation and knowing to what that might lead, committed suicide. The claim of her relatives in this country to the little property that is here has been disallowed by the Custodian because she was not deprived of her liberty. I think that is a strange conclusion. In another case—this really applies to a category of cases—it seems that there was a habit in Berlin of taking to gaol people against whom this kind of discrimination was practised and telling them that they could get out if they signed away their property, but that, if they did not do so within eight days, on the eighth day they would be shot.
I know of one case in which a man remained in prison under that threat for three days, heard other people shot in pursuance of a similar threat to that made against him and therefore signed away his property. His relatives have had their claim disallowed by the Custodian of Enemy Property on the ground that he cannot regard only three


days' imprisonment as really a deprivation of liberty. In this country we have our own ways of defining "deprivation of liberty." We know what a false arrest and what malicious prosecution are. We define them for our own purposes, and quite rightly, in the broadest terms. Why does not the Custodian regard himself as not merely being bound by the rules he himself has laid down, but bound to interpret their words according to their natural and ordinary meaning?
I shall have a good deal more to say on specific points when we come to the Committee stage but I think I have said enough to show that it is surely in every way better that somewhere or other we should put into the Bill a precise definition of what kind of assets—which might prima facie be regarded as enemy assets—we are going to exempt from treatment as enemy property.

Mr. Ellis Smith: What was the nationality of the last man to whom my hon. Friend has referred?

Mr. Silverman: German by birth, but of course he was a person to whom the Nuremberg laws related, so that his German nationality had been withdrawn and he was most certainly a person who did not enjoy the full rights of citizenship in his country. That is all that was required by the agreement to which we made ourselves a party in Paris.
I am quite certain that everybody in the House, and certainly the Government, do not desire to see petty injustices inflicted on this handful of people, the flotsam and jetsam of one of the biggest catastrophes in all human history. I feel quite certain that the Custodian does not want to see that either; and that he feels himself, in spite of his own desire to interpret things more generously—and, one would have thought, more justly—in some way inhibited by the directions given to him or by the narrow terms of the orders under which he operates. Therefore, I say to my right hon. Friend: Remove those inhibitions from him. Let us define exactly what we mean by an enemy asset, and what we do not regard as an enemy asset in such terms that they may be clearly understood by the people and obviously and justly interpreted by everybody whose business it is to administer them.
Finally, I should like to say a word in support of what the right hon. Member for North Leeds said. There really is not any reason in the world why the Government, the President of the Board of Trade, the Chancellor of the Exchequer, the Custodian of Enemy Property or anybody else in this country should be sole judge in his own case. There is no reason why there should not be some sort of third-party judgment to administer these matters, just as there was third-party judgment administering cognate matters after the end of the 1914–18 war. A Mixed Arbitral Tribunal was a third-party judgment, was it not? I should have thought so. In any case, I would be content with that. It is a little better than having no rules and no third-party judgment of any kind.

Mr. Glenvil Hall: Surely my hon. Friend is in error when he says that there is to be no third-party judgment under the Bill. We are to have the Board of Trade, who are answerable to this House. If the suggestion which my hon. Friend now makes were carried out, it would mean that there would be no Ministerial responsibility to this House at all. After all, Orders in Council have to be passed here, and we shall get the judgment of which my hon. Friend speaks. There is the Advisory Committee, the Administrator, the President of the Board of Trade, and this House. I do not know what more my hon. Friend wants.

Mr. Silverman: I have heard this kind of argument so often in so many connections that I am surprised to hear it again from my right hon. Friend. I know that he is actuated by the best of motives in what he says. I repeat—I do not want any misunderstanding about it—that I do not suspect anybody wants to be harsh, unjust, or guilty of double dealing about this. If I suggest a third-party judgment, it is as much for the protection of the officials as of anybody else.
I distrust the argument that because the Minister is ultimately responsible to the House, that can take the place of third-party judgment. It does not. I have the greatest possible respect and admiration for my right hon. Friend. He has done a magnificent job in his post throughout these four and a half difficult years. He might some day have to


defend to this House a decision of the Custodian with which I disagree. What would he want me to do?
If he says that that is to be the only kind of third-panty judgment that I am to be allowed, am I to put down a motion of censure against him? Am I to make it a question of confidence in him, and so make it a question of confidence in the Government? I have every confidence in the Government. That confidence would not be in the least disturbed because in some individual case the Custodian of Enemy Property had come to a decision with which I did not agree. I would not in the least want to imperil the position of my right hon. Friend, or the Government, or this party, in this House or in the country on some individual, isolated instance of a mistake of that kind. But my right hon. Friend says that that is all he would like to leave to me and that he thinks that that is sufficient. I am sure he does not.
Why should these things not be determined in a non-political atmosphere according to agreed rules? Certainly, in the agreement of the rules, this House must take its part. We, or at any rate the majority of us, must consent to the form of the Orders in Council or to the form of the Bill. What we ought to do in this matter is what we do with any other Bill. Having decided what the law is to be, we do not insist on administering it ourselves in the House of Commons. We set up courts of law and courts of appeal to do that. Nobody says that if a criminal is wrongly convicted, his proper remedy is to complain to the Home Secretary or to the House of Commons. All I am asking is for the same rule, and I am sure that it is a wise one.
Without wishing to press my right hon. Friend further at this juncture, I commend these considerations to him. I hope that between now and the Committee stage he will see whether we cannot, in Committee, put into the Bill a number of matters which I am sure all of us would like to see in operation, whether they are in the Bill or not.

5.20 p.m.

Mr. Eccles: The submission which the hon. Member for Nelson and Colne (Mr. S. Silverman) has made on behalf of those who stood out

against the Nazis will, I think, find ready acceptance in all parts of the House, and we should like to see what he has suggested put into the Bill more clearly than it is at present. I would also add that now we are engaged in a great war of ideas probably for the rest of our lifetime it is particularly important that we should stand up for those who care for freedom and make their attempt behind the Iron Curtain to support democratic ideals. If we let down those who have done that in the past, it is no encouragement to those who are trying to do so now.
I want to join in what my right hon. Friend said about the intolerable delay in bringing forward this Bill. The agreement between the 18 Powers was negotiated in December, 1945, and signed a month afterwards, yet we have had to wait four years for this machinery Bill. It does not yet tell us how the assets will be distributed; it merely sets up the machinery and indicates the persons who will make the distribution. Why have we delayed so long? Why is it that the United Kingdom is behind the other Allied countries who, long ago, introduced legislation to deal with this matter?
The reason seems to us to be connected with the letter signed by the Governor of the Bank of England, and sent round under Treasury instructions in December of last year, which stated that after consideration His Majesty's Government had decided not to avail themselves of the option under Article 6A of the Paris Agreement. It was only at the last moment that we were able, by the intervention of my noble Friend Lord Woolton, in another place, and myself, in this House, to get that decision reversed. It was quite clear from the speech of the Economic Secretary to the Treasury, on 20th January, that the Government had not made up their mind what to do about German assets in this country because they could not come to a decision on the principle by which distribution should be made between different classes of creditors.
The Bill, at any rate has cleared up something. We are glad to know that there is to be an option to those creditors who come within the ambit of Article 6A, and the first question I want to ask is: when has the Government to tell the Inter-Allied Reparation Agency whether we shall avail ourselves of the option


under Article 6A? Reading the agreement it looks as though 24th January last was the day on which we had to declare our policy, but it now appears that all we had to do by then was to submit a list of our claims so that at a future date we could decide whether or not we would take up the option. We want to know what the closing date is in this important matter.
I am not sure whether the House is fully seized of exactly what is the difficulty under Article 6A. In so far as British nationals were secured creditors of German debtors they have, of course, taken their security and sold it long ago. We are not dealing with secured creditors at all, but there are some creditors of whom banks, under the standstill agreement, are the chief, who have lent money to German firms or nationals who happen to have had assets outside Germany which have been seized by various custodians of enemy property, but which were not secured to the creditor. Article 6A says that each country may, if it so chooses, set off those assets which happen to belong to creditors of the same persons against these debts and not put them into the international pool. If these assets are put into the international pool, the United Kingdom receives back only 28 per cent. Therefore, it is to the advantage of Great Britain as a whole that none of these assets which we can use wholly to satisfy one of our claims should be put into the international pool, since that will mean that they will be diminished when it comes to a share-out for British creditors.

Mr. C. Poole: I must be duller than I thought, but does not Article 6A provide that the total amount which a country may realise shall stand against its 28 per cent. of the total reparations assets? To me, Article 6A is very clear.

Mr. Eccles: Under Article 6A a country is entitled to withhold from the pool those assets which are found to have been owned by people who had claims upon the same German persons or firms.
It must, first of all, be a principle that we do not lose any foreign exchange for this country. We must, therefore, adopt a procedure which means that the smallest total of assets seized in this country is put into the pool. The second reason

for implementing this section of the Paris Agreement is that those creditors who will be able to benefit by this machinery have special claims. Here I want to refer to the speech made by the Economic Secretary on 20th January. He said that creditors who did not have a debtor possessing any assets which have been seized by the Custodian of Enemy Property here would say that it was unfair to them that a person could claim against a particular piece of property here and so get more of his claim than the one who had not got such a piece of property to claim against. The hon. Gentleman also said:
They"—
that is, the general run of creditors—
would say that it was a pure accident of history that certain assets of pre-war German owners in this country happened to be owned by the same German individuals who were the debtors to the corresponding creditors here. It could be argued that that was a matter of chance and, therefore, if we followed that course of action it would be unfair to those creditors."—[OFFICIAL REPORT, 20th January, 1949; Vol. 460, c. 422.]
That is not correct; it is not a matter of chance that there were in this country, when the war broke out, assets belonging to those debtors. The reason is that when the standstill agreement was renewed—and His Majesty's Government at the time pressed urgently that it should be renewed—one of the conditions which the Germans had to comply with to get the renewal of those Credits was to present to the British banks a list of customers. These were looked over by the British banks and a certain number of them were selected, who became co-debtors with the German banks. That is to say, if the German banks failed, the British bank had recourse to the firms it had selected as co-debtors to the bank to which it had made the loan.
When selecting these firms as co-debtors, the British banks and insurance companies took care to select firms in the exporting trade because they wanted co-debtors who might have property abroad if the worst happened. In many instances they did not agree to the list of debtors as submitted to them by the German bank. They said "You have some other customers who trade abroad, and we would like to have them tied up." That is how it comes about that there are substantial assets in this country which belong to the co-debtors who


came forward as part of the renewal of the standstill agreement, but the assets of these co-debtors were not specifically secured to the British banks. That is why the Economic Secretary to the Treasury was wrong in saying that it is an accident that the Article 6A creditors—if I might call them that—are not in a special position.
The hon. Gentleman must also be wrong for the reason that the 18 nations which met in Paris in 1945 recognised the special position of this category of creditor by including the option in Article 6. As far as I know, all the other countries concerned have availed themselves of Article 6A and in none of them have the creditors who were not able to attach particular pieces of property complained of unfair treatment. Therefore, one must ask whether the scheme proposed as an alternative by the Financial Secretary to the Treasury is a fair one, or not.
The Government's proposal is that these creditors should choose whether to satisfy their claim out of some particular piece of property which it is found that their debtors had in this country. If they do that, that finishes it and they cannot proceed to try to get the balance of their claims settled out of the pool. On the other hand, they may abandon a particular piece of property and make their claim against the general pool. This looks like the worst of both worlds. In the first place, the Custodian must provide full information of the assets which are here or no one can make up his mind which option to take. Let us assume he provides full information. If the bank finds that, having a credit of say £100,000, his debtor has only £1,000 worth of assets, of course he will not take up the option, because one per cent. would be less than the dividend he would expect to get out of the pool. But what happens? That £1,000 goes into the international pool and our share is diminished by 72 per cent. and we lose exchange for this country, which is surely wrong.

Mr. Glenvil Hall: indicated dissent.

Mr. Eccles: That is the opinion of the banks concerned. Supposing he does the reverse and finds that the asset looks as if it will yield more than he would get out of the pool. Of course he would take up the option. I suggest that this is not good sense. What we want to ensure is

that none of these assets goes into the pool and is diminished in this way. I do not see why the Government need make an arrangement of this kind. The proper thing to do would be to allow the creditor whose debtor happened to have some property in this country to get hold of the property first and then put the balance of his claim against the pool and the Advisory Committee can decide whether they ought to put a lower priority on claims already satisfied to some extent out of property which has been sold and used to pay for part of it in this country. That is the clear and sensible thing to do. We have the Advisory Committee there precisely for that sort of job.
Supposing the Government cannot do that for some reason—they do not like the banks—when a bank finds there is only perhaps 6d. in the £ it can get if it attaches a specific piece of property, let it do this and then out of the general pool the dividend it receives could be diminished by the 6d. This could be done by another rule made by this Advisory Committee procedure. In that way they would not get an extra cut, but the country would be sure that the small assets not sufficient to pay the average dividend to the creditor would not slip through our fingers and foreign exchange be lost.
The importance of giving full information stands out clearly. We cannot work the option unless people know what are the assets and can find out whether they can or cannot attach a particular piece of property to their debt. I hope the Government will spare no pains to give the fullest possible list of assets to the debtors so that they can make the right choice. I am not clear about subsection (6) of Clause 1, to which the hon. Member for Nelson and Colne and my right hon. Friend referred. We should have a very full explanation of that obscure subsection in order that we may be in a position to consider amending it if it does not turn out to be satisfactory.
I suspect that the different classes of creditors here will constitute a fairly formidable problem for the Advisory Committee and I hope that those who represent the long-term loans, medium-term loans and commercial credits will not take too long to make up their minds as to the relative importance of their


different categories of claims. We have waited a very long time to start this business. Other countries have got ahead of us, especially the United States and Belgium, and, after all, it is not a very large sum of money. What is important is that we should get on with the settlement of claims of people who have them.
There are a number of refugees in this country who have claims which could not be brought within the scope of the Bill unless we moved a new Clause. They have claims in Germany which have nothing to do with assets outside Germany. I hear that matters are moving faster in the American zone than in our part of Germany. The Americans are enabling refugees to get back their property which was confiscated by the Nazi Government with greater ease and rapidity than is the case in our zone. We ought to look into that point.
I am sure that all hon. Members have in the last four years had one or two letters from Germans living here who have no claim against the assets seized outside Germany but who have a claim inside Germany which is a very real one. There are also British subjects who left Germany just before the war began and whose property in Germany was seized. Many of them are in sore straits and deserve to be helped more by His Majesty's Government to recover their property in Germany. It is now time, four and a half years after the war, that, in the case of a British subject who left Germany in August, 1939, leaving all his property in Germany, the whole of which was seized and confiscated by the Nazis, we got something back for that man. He may have stayed there to the very end to do some work which was of national importance. I hope that the Parliamentary Secretary will say a word about what His Majesty's Government are doing for that class of person.

5.42 p.m.

Mr. Cecil Poole: I confess to a good deal of trepidation in trying to say anything on this Bill because of its complex character and because it is fairly obvious that in all parts of the House Members are experiencing considerable difficulty in arriving at what are the Government's intentions under the Bill. The point which I wish to bring

before the House is a small one, but it is, I think, of some importance. I wonder why the Government have brought in a Bill dealing only with Germany enemy property, and why they have not embraced the whole of ex-enemy property in one Bill? There are in this country considerable assets of enemy citizens other than Germans.
I ask this question because, if my information is correct, other enemy assets in this country—I shall not mention the country because that would indicate the property—have recently been realised for a large sum of money. I have reason to believe that the amounts which have been realised by the sale of that particular industrial undertaking are finding their way back to the enemy subjects to whom the undertaking originally belonged. If that be true, it is defeating the whole purpose of reparations. I should like to ask why we are leaving the other enemy assets in this country untouched at present? The asset to which I am referring has been in the hands of the Custodian all through the war. It would be a shocking injustice if the Custodian has today taken the step of selling those assets and has allowed the proceeds to find their way back to the enemy State.
In moving the Second Reading of the Bill the Financial Secretary said that the Government would apply the assets as far as they will go. We have heard that they will go to the extent of meeting 12 per cent. of the claims, that there will be £15 million available against £120 million claimed. They will not go as far as they might go because under the Paris Agreement the share which accrues to this country is only 28 per cent. of total reparations. I do not wish to go too deeply into the subject, but I confess to a great feeling of disappointment at finding that the United States of America is, along with ourselves, taking 28 per cent. out of the funds available for reparations.
It would have been a magnificent gesture on the part of our Allies had they foregone their 28 per cent. in the interests of countries such as the Netherlands, for example, whose drawing will be only 3 per cent. Had they done so as a thank offering that their country had been spared the horrors which were inflicted upon our own and other countries in Europe—28 per cent. means nothing to the United States—it would have been a


gesture which would have been appreciated throughout the world.
The provisions of the Bill are so vague and are capable of so many interpretations that it is difficult for us to know exactly in what position we may find ourselves under the Orders in Council. But when my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) was speaking we were all brought back to some of the harsh, stern horrors which were perpetrated against many millions of people throughout Europe during the war. I am sure that we were all moved by the one or two accounts which he gave us of cases which had come to his notice. Because of that, I am glad that there will be power under the Orders in Council to differentiate between the different types of claims.
There is no hon. Member in this House who will say that the claim of those people who were mentioned by my hon. Friend should not take precedence over the claim of those who lost money in the Austrian Loan. Those who were creditors in respect of the Austrian Loan must of necessity come much lower down the scale of payments than people who suffered in the way my hon. Friend described. They must come lower down the scale; in fact, I am sorry that they will be admitted into the claim at all. After all, they loaned their money at an exorbitantly high rate of interest because of the great risks which they took, and if the risks unfortunately materialised, I do not think they can rightly or properly have any share in these reparation payments.
Let us always remember that much of that money helped to bolster up Nazism in Europe in its early days. It seems a little incongruous that people whose money helped to bolster up Nazism in Europe should be able to make a claim upon reparations following a war to destroy Nazism. Therefore I hope that a definite and positive differentiation will be made, and that those people who merely have a claim by virtue of money which they loaned to the State of Austria in pre-Nazi days will find their proper place in the scale.
It is and must be to all of us in this House a matter of great regret that those who have suffered so much during the war—I am speaking of those who lost homes and businesses apart from the loss of their loved ones—will be offered a

return which is so small. But that is one of the things which always follow war. We cannot compensate them for the great harm which has been done to them, but this Bill does at least enable us to set up the machinery by which some small measure of compensation will be payable to them.

5.50 p.m.

Colonel Dower: I wish to make one real point which has not yet been made in these discussions. But before I come to it I should like to ask the right hon. Gentleman one or two questions. I know that he will not think that I am criticising if I say that this Bill in certain of its relevant details is one about which hon. Members on both sides of the House have not a very clear understanding. I understood the right hon. Gentleman to say that £15 million was all that was available, or likely to be available, for distribution, and that under this Bill it will not be possible to collect any more than the £15 million already stated. It really is a very small sum.
Will the Government itself take priority or only share equally with private individuals? If an individual who establishes a claim receives only half a crown of the debt which is owing, will the Government only receive half a crown as well? I would like a clear understanding on that, because it is rather important. If, as I understood the right hon. Gentleman to say, the Government claim will be about £3 million, that means there will be only £12 million to satisfy claims worth about £120 million; which would reduce it to 10 per cent., only two shillings and not even half a crown in the pound.
The other question is, can something be done for the wretched people who establish these claims of which only one-tenth is to be met? We are told that they will have a claim which they can bring individually and independently against their particular debtor to the extent of nine-tenths. Whether they will see any of that money is extremely doubtful. Only recently I returned from the Colonies of East Africa. I appreciate that it does not come under this Bill, but the right hon. Gentleman was perfectly right when he said there will be a considerable amount of legislation and action to be taken there. I hope that


the right hon. Gentleman will speak to his right hon. Friend the Secretary of State for the Colonies—who after all, has discussions with the Colonies—as to what legislation is necessary. I hope that some of the really incredible muddles now going on in the East African Colonies will be dealt with. This Bill is very slow indeed in being brought forward, and I hope that there will be no greater delay with the Colonial problem.
I come now to the principal point I wish to make. I am not such a great admirer of some of the actions of the Custodian of Enemy Property. Into his hands has been put properties of all kinds including real estate and houses. Cases have been drawn to my attention where the Custodian neglected to give notice of bomb damage, where first-aid repairs were never carried out as they should have been, and where the President of the War Damage Commission wrote off something between 33 per cent. and 50 per cent. of the cost of works payment as work which had been caused by the bad management and deterioration of the property which had been in the hands of the Custodian. I am not saying that this is general. The Custodian may in many cases have carried out his duties beyond criticism. But there are such cases as I have mentioned, and I should like the right hon. Gentleman to tell me what the position is. This is property held by Germans before the war, and presumably some sort of action would be brought or would lie against the Custodian for mismanagement or depreciation of the estates which have been under his control.
So far as I can see, the people who will lose by any bad management on the part of the Custodian will be those unfortunate people who are to get something out of this Bill. It seems to me extraordinary, because it has always been the law of this land that an action can be brought against a Ministry or against a person, however great or however small or however powerful; but that this gentleman will be put into an entirely different position from any other person. I wish to know if there have been cases of bad management of enemy property whilst it was in the control of the Custodian; what steps if any have been taken, and by whom. The right hon. Gentleman may not believe it, but I am sure he has the

support of hon. Members in all parts of the House for this Bill. No doubt there will be a lot of minor points which will be ironed out in Committee, but I should like an answer to the special questions which I have asked.

5.56 p.m.

Mr. Francis Noel-Baker: This Second Reading Debate seems to me to be a suitable opportunity for seeking information which I have been wanting to obtain for some time and which is of particular interest to the neighbourhood of my own Division. Perhaps I may put my point by arguing from the particular case to the general.
I am interested in the circumstances surrounding the sale of a factory which before the war belonged to a German firm and which during the war was appropriated by the Board of Trade. A few weeks ago it was sold by the Government to a new private owner—an event which in this case has resulted in all sorts of complications. The factory is engaged in the production of mining equipment, and therefore is of considerable national importance at the present time. The question I wish to ask is quite simple.
What is the policy of the Government as regards the realisation of German assets in this country? Is it the policy, with regard to industrial undertakings for example, that they should be sold to the highest bidder without any other consideration being taken into account? Because it does seem to me that in this specific case it might have been expected that the National Coal Board would have been consulted about the sale. It might have been found more advantageous in the national interest for this factory to be kept under public ownership instead of being sold to a new private owner.
As the moneys realised from these assets will apparently only be enough to meet something between 10 and 12 per cent. of the total claims, it seems to me that other considerations, apart from the question of the high price paid, ought to have been borne in mind when this sale took place. I should be grateful, therefore, if my hon. Friend would tell the House what is the policy regarding the realisation of assets of this sort, and perhaps either during his remarks or on a later occasion he would give me


specific information about the case I have drawn to his attention.

5.58 p.m.

Mr. Janner: This Bill is an extremely important step in the direction of the ultimate decisions which will be taken on signing the Peace Treaty. It is essential when we are dealing with a Measure of this sort that we should reach so far as is possible, decisions and determinations consistent with our intentions which will be expressed when that Peace Treaty is to be put into effect.
It is a highly technical Bill. Yet sometimes when considering technical Bills one finds incidents arising in one's mind—historical events, tragedies of war and many tragedies of peace—in spite of the fact that the terms of the Bill itself apparently deal with a purely mundane matter. I should like to ask the Government to incorporate in this Bill some Clauses which will clearly indicate that we have not forgotten that there was a very marked difference between the enemy alien and the person who though apparently a national of one of those countries concerned, was either fighting underground in order to establish democracy or was himself the victim—the persecuted victim—thrown into the conflict before the war to preserve democracy started.
Several matters have been referred to by various hon. Members. I am not quite sure that the question raised by the hon. Member for Chippenham (Mr. Eccles) falls within the terms of this Bill. He referred to the fact that today there are a number of people who suffered, owing to the attacks of the Nazis upon them in consequence of their racial, religious or political grouping, by having their effects wrested from them in Germany. The hon. Member said that there was a dilatory procedure in regard to giving them back those assets which were, and are, their own in accordance with all human and all real legal principles. There is no doubt that that procedure ought to be expedited.
This Bill however refers to the Trading with the Enemy Act, 1939, and the Agreement on Reparation from Germany of 14th January, 1946. The Custodian of Enemy Property has for years been continuing, under regulations of the Board of Trade, to sort out property, in his

possession. Some of this has already been restored to claimants who might have been regarded technically as enemy aliens but who were recognised by the Government as deserving, in their position as victims of persecution or discrimination, of special and proper considerate treatment.
Those of us who have had anything at all to do with these matters know very well that hitherto the Board of Trade has had a defined policy on this, Documents on this have been referred to, and many of us have had practical experience of them. I am of the opinion that some of the provisions required to establish that a person was a real victim of the inhumanity which prevailed in Germany, are ridiculous. I ask that at this stage for example we rectify the position by making it perfectly clear in the Bill that a distinction will be drawn, between the enemy alien and his victim and that a person—whether that person was actually incarcerated or fleeing from incarceration—who was a victim of persecution should be categorically and definitely recognised as entitled to reclaim properties which can be established as having been his in this country or in any of the other allied countries.
The matter does not finish there. I think that one is justified in making this claim in referring to the whole history of the arrangements which were being made, or which are intended to be made, in order to deal with claims of this nature. It will be remembered that in the Agreement on Reparation from Germany on the Establishment of an Inter-Allied Reparation Agency it was definitely stated that provision was to be made to deal with certain cases:
In recognition of the fact that large numbers of persons have suffered heavily at the hands of the Nazis and now stand in dire need of aid to promote their rehabilitation but will be unable to claim the assistance of any Government receiving reparation from Germany. …
I do not want to read the whole of the Article, but I wish to refer to subsequent Treaties and arrangements which have been made and which are in accordance with the intention that was in the minds of those who were parties to that Agreement. In Article 25 of the Treaties of Peace with Roumania, there was a special provision which said:


All property, rights and interests in Roumania of persons, organisations or communities which, individually or as members of groups, were the objects of racial, religious or other Fascist measures of persecution, and remaining heirless or unclaimed for six months after the coming into force of the present Treaty, shall be transferred by the Roumanian Government to organisations in Roumania representative of such persons, organisations, or communities.
There was a similiar provision in the Treaty of Peace with Hungary. Recently in the law which has been passed in respect of restitution of property in Germany to victims of Nazi oppression—Law No. 59 of the Military Government of Germany—there were the words:
… trust corporations … shall be formed for the purpose of claiming unclaimed and heirless property.
I refer to these because I think that we should take the lead indicating that we are determined to see that human rights are properly respected and that when a nation has committed an affront against the principles of human rights those of their nationals who were affected by that transgression should not, when we come to a question of dealing with their assets, be regarded as part of the brutal group who brought the affliction upon them.
That leads me to these questions. First, I should like to know definitely whether it is intended to continue the policy which the Board of Trade outlined for the Custodian in respect of claims made by persons who were the victims of persecution. Is it intended, as I think it should be, that we should go further and that those claims should be sustainable even if the requirements contained in the document issued by the Board of Trade are not strictly fulfilled to the letter? One appreciates the fact that the individuals claiming would have had to be loyal to the Allied cause. One appreciates that they would have to establish a claim, but I am saying that this is the time when we should regard the question in a more generous spirit and should remove some of the heavy restrictions against claimants or make certain that these shall not be interpreted in the way in which they have been interpreted hitherto.
There is an additional question, which concerns assets that have come into our possession and which cannot be claimed

at all by any living people or by any of their personal successors according to law. Many families were completely wiped out, and we know that it was a question not of hundreds of thousands, but of six million people being brutally exterminated. Naturally, when six million people are destroyed, one can readily understand that whole families suffered that fate. The result is that there are certain assets which belonged to the victims of the terrible torture and persecution but which are not claimable by definite individuals and which cannot be restored to anyone who is in either direct or indirect line of descent from the victim to whom the property belonged.
It has been recognised by the very law to which I referred a moment ago, that in cases of that description, provision should be made whereby a trust corporation should be established, and that it should be entitled to receive the assets of these victims so that the property may be used in order to settle, rehabilitate or otherwise help those people of similar groups who are the remnants left by the persecutions which took place. I suggest to the Government that, when we are dealing with this Bill, we should give a lead by indicating that, in the interests of justice and in the cause of reasonable and humane treatment of victims who today are unable to help themselves, we shall not take the funds or assets which fellow-victims of similar persecutions have left in our hands except to help those survivors. I say this in the hope that it will apply not only to victims of racial or religious persecution, but also to victims of political persecution, and in the hope that all these points will be considered before the Committee stage. There should be some provision made to establish a trust corporation to which should be handed over such funds for the purpose of distribution in the manner I have indicated.
There is one other point. I should like to ask a question concerning Clause 8 (1) of the Bill. What exactly is meant by the words "British protected person"? I do not know of any legal definition that covers this phrase, and perhaps some Member who does can explain it. Will it include the type of case, referred to here today, of the individual who had come to this country, who was not naturalised but who had


suffered in the manner I have indicated? Would it enable him to recover assets which had come, or which might come in future, into the hands of the Administrator, whoever he may be? I should like to have an answer to this question. I hope the Minister will make clear in the Bill, before it reaches the final stage, all these matters, in order that there shall be no ambiguity about them.
It is very difficult to know, from the Bill and the statement which we have had today, exactly what is intended to be concerned in the order. Frankly, I do not think we should leave the question in this uncertain condition. We should, during the Committee stage and subsequently, improve the Bill by introducing such Amendments as will make it possible for a definite policy to be laid down, instead of leaving the matter in the air.

6.17 p.m.

Mr. John Foster: The Bill under consideration today has been attacked on the ground of delay, because, as was pointed out by several speakers, the time which the Government have taken in deciding what they should do with German assets in this country has been inordinate. They were granted the right in the Reparation Agreement to acquire all German assets in this country, but they wasted a good many years before deciding to do so, and, what is more serious, at one moment they decided that they would not avail themselves of the option given to them under Article 6A of the Reparation Agreement.
That was a very serious mistake, and, though one never expects a Government to admit that it has made a mistake, I should like to ask the Secretary for Overseas Trade, without any hope of getting any answer, whether (a) the Government at one time decided not to avail themselves of the option under Article 6A; (b) whether they sent a letter to financial institutions in the City of London saying that they were not going to avail themselves of this option under Article 6A; and (c) whether they reversed that decision, and whether this Bill is the effect of that reversed decision? I have no hope of an answer, because I am afraid the hon. Gentleman would have to admit that the Government had made an error.
The other obvious disadvantage of this Bill is the unreasonable amount of time which was given for its consideration between First and Second Readings. That is a great disadvantage in this case, because, as every speaker has stressed, it is full of technicalities. The points which have been made can be divided into two classes. First, there is the point with respect to the impact of this Bill on the Reparation Agreement, and, secondly, the observations made by the hon. Member for Nelson and Colne (Mr. S. Silverman) and some of the remarks of my hon. Friend the Member for Chippenham (Mr. Eccles) with regard to the insertion in this Bill of certain provisions to safeguard the claims of refugees and people who have been the victims of Nazi oppression. I propose to make a few remarks in the same way.
With regard to the question of the Reparation Agreement, it is first of all necessary to understand the position about German reparations. The Reparation Agreement decided that there were to be two categories of reparation—Category A and Category B. Category B is the physical reparation extracted in the form of capital goods or assets from Germany and is represented to the layman largely by the issue of dismantling, with which we are not concerned here. Category A is a different kind of German reparation of which we in the United Kingdom are entitled to 28 per cent.
There is a very important point here which was mentioned by my hon. Friend the Member for Chippenham. I gathered from the fact that the Financial Secretary and the Secretary for Overseas Trade were shaking their heads that they did not agree with him. I should like to put the point again, if only to convince them that the point about foreign exchange is correct. It is important because I am sure that the Chancellor of the Exchequer would not want his right hon. Friend the Financial Secretary to part with any unnecessary foreign exchange.

Mr. Glenvil Hall: I would point out to the hon. Gentleman that my hon. Friend and I were not shaking our heads at that part of what the hon. Member for Chippenham (Mr. Eccles) was saying.

Mr. Foster: May I then make sure that the right hon. Gentleman appreciates that by this Bill they are sacrificing a


certain amount of foreign exchange? He will probably shake his head at that, but let me try to convince him. Under Article 6A of the Reparation Agreement, the German assets in every individual country can be collected, and, in so far as they are collected and paid out, they have got to be set against our 28 per cent. of general German reparations, subject to the very important qualification that every contract debt which is paid out of German assets to a British creditor shall not be deducted from the 28 per cent. Without doubt, the right hon. Gentleman knows the Article, and he will find that it shall be set against the reparation amount less various other kinds of expenses, and, finally, contract debts.
What does that mean? We have £15 million in this country, and we will assume that our eventual share of reparations will be £20 million. On that assumption, and if there were no contract debts in this country, we would collect £15 million here, and, instead of getting £20 million out of general reparations, we would get only £5 million. But supposing there were £10 million of debts in this country owing on contracts from German to British subjects, that would not be deducted from our reparation share, and, therefore, we would get £10 million more out of our 28 per cent., because, instead of deducting £10 million out of the £20 million, we would deduct only £5 million.
What does that mean in practical terms? It means that it is very important that where there is a contract debt the Bill should encourage, and, in fact, almost force, the contract creditor to proceed on his contract by the machinery of the Bill against the German assets in this country because every pound of that will not be deducted from the 28 per cent. due to us. It follows in reverse, therefore, that where we discourage or prevent a British creditor who is entitled on a contract to a claim of so many pounds against a German, our share of the reparations will be diminished by that amount, because, instead of claiming on his contract, he has to claim apart from it, and any such claim will be set off against our share in the reparations.
I am not asking whether the Financial Secretary or the Secretary for Overseas Trade agrees, but I am asking whether

he understands what I am saying because if he does not, then I think I ought to try to put it a little more clearly. It is very important that he should understand this because, obviously, if I am correct, the machinery of this Bill is going to lose us foreign exchange. I say that because the only way so far as I can see—and I shall be glad to be corrected if I am wrong—in which these contract creditors are taken care of—and who, from the national point of view, come first, because they are saving us foreign exchange—is under Clause 1 (4, c).
As I understand it, an Order in Council is going to be made enabling the proceeds of German enemy property belonging to particular persons to be distributed to the persons who make a claim. In introducing this Bill, the right hon. Gentleman explained that an option was going to be given. But has he realised how unfair that option is, because he said that if a person made a claim against specific assets he was going to be excluded from the general pool. How is a person who is given the option to exercise it? He has not all the information, nor can he get all the information necessary from the Custodian of Enemy Property.
Let us assume that somebody comes to the right hon. Gentleman and says, "I have a claim for £10,000 against a specific German firm. Shall I exercise my option or not?" The information required before he can make a decision is, first of all, what are the assets of that German firm in this country, and that information can be given by the Custodian of Enemy Property. The second bit of information he requires to know is what are the other claims, which of them is going to be enforced, and in how many cases is the option going to be exercised. How can anybody know that? Supposing there are 100 claims how can one know that all the claimants are going to exercise their option?
But it does not stop there, because it depends on the dividend to be paid whether one exercises the option or not. If the dividend is going to be 20 per cent., then one can assume that it will be exercised, but if it is only 4 per cent. then very different considerations arise. Therefore, from the first point of view, the option is impossible to work in practice. The second point is that it is


unfair. It is like saying to a secured creditor, "If you enforce your security, you cannot claim for the balance." The only way is, as my hon. Friend the Member for Chippenham suggested, to work out some scheme by which if a secured creditor gets a certain amount, his claim for the balance should be postponed until other people get abreast of him. It would be very unfair if a creditor claimed against specific assets and recovered less than if he claimed against the general pool.
I should be glad if the Secretary for Overseas Trade would tell us how he can defend the giving of this option on the terms I have outlined. How can he defend giving the option to a man who does not know how to exercise it owing to the fact that there are a lot of factors over which he has no control, and about which he has no knowledge and is not in the position to obtain that knowledge? I should like to know if he considers it fair that if a man who has a claim against specific assets exercises an option against those assets and recovers less than if he had not exercised the option, he should be precluded from getting the balance.
Passing to the second class of general observations on this Bill, I think the arguments made by the hon. Members for Nelson and Colne (Mr. S. Silverman) and West Leicester (Mr. Janner) were entirely correct. I am not sure that they pointed out what was really the great defect in this Bill, that it left so much to be done by Order in Council. Under subsection (6) of Clause 1 it is possible for His Majesty's Government to make Orders in Council which will at least safeguard the position as it is now with regard to the victims of Nazi oppression. A letter has been read out from the Department of the Custodian of Enemy Property giving the properties on which he acted. It was pointed out that the principles on which he acted were less generous than those embodied in the agreement about reparations. Instances were given where the Custodian on the one hand said that he would give back property to victims of Nazi oppression who had been deprived of liberty, but on the other hand decided very arbitrarily and unjustly that people who had been in labour camps or who had only been in prison for three days were not deprived of liberty.
There are literally hundreds of these cases. I should like to refer to a case in Shanghai, in the Japanese-created ghetto in which Jews were compelled to live under appalling conditions for two years from 1943 until the liberation in 1945. The camp was under the command of two Japanese officers who acted in co-operation with and under the instructions of the Gestapo. This, according to the Custodian of Enemy Property, was not deprivation of liberty. What we ask is that the rules which the Custodian applies should be such that at least not less favourable conditions would be given in such a case. Then we ask that a humane and just interpretation of those rules should be put in the Bill.
There are one or two isolated points on which I should like to ask the Secretary for Overseas Trade to give us some information. Does he think it right that no provision is made in the Bill for the appointment of a tribunal or judicial proceedings? I know that he will probably reply that it can be done by Order in Council, but the disadvantage of this Bill is that we do not know what the functions of the Government are as regards an Order in Council, and we do not know on what principle they propose to have matters determined judicially. The statement of the Financial Secretary that the Minister was responsible and that, therefore, it was sufficient safeguard for a person to have difficult questions determined, was quite rightly assailed by the hon. Member for Nelson and Colne.
Orders in Council are going to be subject only to negative Resolution of both Houses. I suggest that at the very least they should be the subject of affirmative Resolution. That is the very least that should be done in view of the importance of this subject and in view of the remarks which were made by the right hon. Gentleman in introducing the Bill when he said that this was an enabling Bill. If any Bill needs an affirmative Resolution it is an enabling Bill. The Government say that it will be sufficient for Orders in Council which are not laid upon the Table to be prayed against in the prescribed time.
Another thing I should like to ask is how the question of what are German enemy debts or German enemy property will be decided. I appreciate that the Government have in mind some kind of


judicial procedure; I give them credit for that, and I think that appears to be the case from the right hon. Gentleman's remarks. But how will it be decided whether any particular piece of property is or is not rightly included in the pool? There will be a lot of difficult questions, and there will be much injustice if the Executive is to be given the power of merely deciding whether a property is German enemy property. I should like to know what machinery the Government have in mind for deciding what constitutes the pool. This is a very important matter which should be made clear by the Bill.
The Bill makes no mention of German shareholders—in other words, shareholders of British nationality in German companies. They seem to have no claim at all. Does the Secretary for Overseas Trade think it is fair that shareholders in German companies should have no claim? I deduce that shareholders in German companies are not included, but if I am wrong I should like to be corrected. In Clause 8 "German enemy debt" does not apparently include a share in a German company or in a German partnership, and I think that also should be considered.
There is one important matter of principle which the hon. Gentleman should consider from the point of view of whether injustice is being done. No German enemy debt exists except to a British subject, as I read the Bill. If that is right it seems extraordinary. Does that mean that somebody who has lived 40, 60 or 80 years in this country, who has not got British nationality but who has a perfectly bona fide claim against a German debtor cannot recover? I say that it apparently does not cover him because, as I understand it, "protected person" is a technical term which means persons in certain territories under His Majesty's protection, like former Indian States.
In Clause 8 the only debts which are protected by this Bill are those owed to British subjects. It seems hard enough on the refugees who have been here 10 or 12 years but who have not managed to acquire British nationality; it seems even harder on those foreigners who have made their homes here and have lived here many years but who apparently, as I understand the Bill,

cannot claim because they are not British subjects. This has never been a country which has discriminated against people in our midst who owe allegiance to the King—and foreigners living in this country do owe allegiance to his Majesty—and it is wrong in principle that a Bill like this should single out only those people who have British nationality for protection in their claims against the Germans.
Another point which I think should be noticed is that according to Clause 8 (1, c), what is put in the pool is anything which was subject to the Trading with the Enemy Act. Those orders were made arbitrarily and without appeal. They were necessarily made in the heat of war and very often with incomplete information, yet every piece of property to which these orders applied will be in the pool. If hon. Members will turn to the top of page 7 of the Bill, they will see that every person whose property became subject to these Trading with the Enemy Orders or who was included as an enemy of the country, called specified enemies—and there I think less error crept in—is affected, and that in both these classes their property will automatically be in the pool.
There should be some provision in the Bill so that both these classes now have a right of appeal. Now is the last time any error can be corrected. There may well be cases where two people of the same name have been confused and orders made against them, and unless they have a right of recourse either to a specially constituted tribunal or to the courts, they will find that their property is included in this pool, from which, of course, they can get no compensation, apart from some rather loosely defined compensation against the German Government; and if they are no longer German nationals they may well find difficutly even in obtaining that nominal compensation.
The last point I have to raise is less important, but I think it may cause injustice to British subjects. There are many companies—quite a few German companies—which are controlled by British subjects. Under the wording of the Bill these companies are treated as German and any assets over here are lost to the British subjects who control them.


They are put into the pool and made available for general distribution. Surely that must be wrong, and it is all the more wrong as the principle of control is used the other way. In sub-paragraph (e) of Clause 8 hon. Members will find that the definition of a German company includes any company abroad which was controlled by Germans. The principle of control is brought into the Bill in order to define a German company but it is not brought into the Bill in order to define a non-German company; and that works injustice on people in this country.
Instances of this injustice have been given to me. For instance, there is the case of a German company which was a wholly-owned subsidiary of a British company. This company had £13,000 assets before the war and this £13,000 was quite properly paid to the Custodian, but the British parent company, if this Bill remains in its present form, will be unable to obtain the £13,000 which obviously belongs to it—although the £13,000 was the holding of a nominal German company—and that sum will be put into the general pool. I ask the Parliamentary Secretary to deal with that instance specifically. Does he think it is right that the German wholly-owned subsidiary should lose its assets in this country and that the parent company or parent person should not be entitled to obtain those assets? Surely that cannot be right.
In conclusion, I ask the Parliamentary Secretary to be so kind as to answer the questions I have asked. There is nothing more frustrating at the end of a debate, especially on a matter which does not raise any party division at all—for speeches on both sides have shown that hon. Members are anxious that the Bill should do what is just and what is best for this country—than when, after having been asked a series of questions, the person who is winding up for the Government says he is not willing to answer them because there is no time. Tonight the hon. Gentleman has all the time in the world in which to answer questions and he has had the opportunity of finding out the answers. I ask him to answer the questions put by my right hon. and hon. Friends and myself.

6.45 p.m.

Mr. Bottomley (Secretary for Overseas Trade): Right hon. and hon. Members on both sides of the House have said

that this is a very technical subject and I agree wholeheartedly with them. I am quite sure it will be readily understood if I cannot deal with the subject in the same expert fashion as that displayed by those hon. Members who have made a special study of it. Indeed, my first temptation is to resist the political implications introduced by the hon. Member for Northwich (Mr. J. Foster). I refrain from continuing in that strain because I think that the right hon. Member for North Leeds (Mr. Peake) set the right tone to the Debate and it is in that spirit that I will endeavour to reply.
I think it is worth repeating that the German enemy property dealt with under this Bill is placed at the disposal of His Majesty's Government by international agreement. By the operation of the Trading with the Enemy Act, 1939, there is a statutory restriction on its disposal and it is for that reason that this Bill is introduced. It gives authority for the Government to carry out the disposal of this property. There are three ways in which we could dispose of the assets, but it is thought that the right thing to do is to collect all the claims of the United Kingdom pre-war creditors against German debtors in respect of all the obligations outstanding before 3rd September, 1939, and to allow all the accumulated assets to be distributed against them. There is provision also to be made whereby a creditor who can point to a German debtor can have an opportunity of claiming against specific assets. He will be able to do so now, although up till now he has been prevented from doing so by the intervention of the Trading with the Enemy Act.
I am in general agreement with the analysis made by the right hon. Member for North Leeds. I think that the meaning of Article 6A of the Paris Agreement, taken in conjunction with the provision of Article 1, is substantially as he outlined it. The position is that the signatory Governments agreed to a certain percentage of reparations going to each country which was a signatory to that agreement.
As to the Category A assets, these are derived from the German property within our special jurisdiction and it is, of course, that kind of property with which we are dealing today. It has been said, and I think correctly, that in certain


circumstances every debt of the kind referred to in Article 6A, which is paid out of the appropriate German asset, may mean that the United Kingdom Government will have a larger share of whatever residual assets there may be when the time comes for the final accounting. So far as we can see, our expectation of sharing in any surplus is slender in the extreme. Nevertheless, I am sure that hon. Members have noticed that provision has been made in this Bill—Clause 1 (4 c)—whereby an opportunity can be taken of this when the Order in Council is drafted.
I also noted that the argument was used that certain types of creditors were more entitled to share in the distribution than were other classes. It is because of contentions of this kind and the necessity for seeing that creditors generally accept them that we have decided on the establishment of an Advisory Committee. My right hon. Friend the Financial Secretary has explained that this Advisory Committee will report before there is an effective Order in Council. I think also I should answer questions put to me about priority claims, and the way in which persons having more than one claim against German assets should be expected to make their claims. These are, I think, from what we have been able to consider, matters upon which the Advisory Committee could give us assistance of great importance, and we should be bound to take note of it.
The right hon. Member for North Leeds asked what it was intended to exclude. The answer, with reference to the Clauses that he named, Clause 1 (4, a) and Clause 1 (4, b), is that this is a drafting matter, and that we are taking enabling power wherever we can—I do not want him to think there is anything sinister in it—which may or may not be required in drafting an Order in Council. The Financial Secretary has already said that the Advisory Committee, to which the right hon. Gentleman referred, will be appointed before questions of differentiation can be put into the Order.
I ought to make this quite clear. In quoting earlier—I will not repeat it—Article 6A of Pant I of the Paris Reparation Agreement, the right hon. Gentleman seemed to infer that although the

Article relates to the method of accounting by signatory Governments for the reparation received in this particular way by them, it would confer rights on individuals. In fact, it confers no rights on individuals. It is money which is given over to the Government that is the reparation authority, and it is for the Government to determine how these funds shall be used.
Another question was asked—I am not sure whether it was by the right hon. Gentleman or not: I think it was by the hon. Member for Northwich and the hon. Member for Chippenham (Mr. Eccles)—about what is to happen if the claims against German assets are less than His Majesty's Government will have to account for in their share of reparations. The answer is that that question would arise if there were a likelihood that the Government would be receiving a sum in excess of the percentage laid down in Article 1 of Part I of the Paris Agreement as being their full share of reparation. In fact, it does not appear likely that we shall get the percentage allocated to us, which is 28 per cent., and it is as certain as certain can be, that there will not be a surplus; so I would suggest to the hon. Gentlemen that their argument is to some extent academic.

Mr. Drayson: Can the hon. Gentleman say whether he means that this 28 per cent. may be reduced to 25 per cent. or 24 per cent., or that the actual money from the 28 per cent. which will be accounted, will be less than the amount required to cover debts here?

Mr. Bottomley: Our share is 28 per cent. We want to get it, but we cannot be certain that we shall get it. It depends on what there is in this country, and the aggregate of what is in the area covered by the Agreement, whether we shall get it.

Mr. Drayson: We cannot get less than the 28 per cent. allocated to us. The question is whether the amount the percentage will realise is the amount we require.

Mr. Bottomley: If the hon. Gentleman had been in earlier, he would have heard that we are allocated 28 per cent. It is precisely because I said we might not get it that I suggested that that argument that there might be a surplus was academic.

Mr. Drayson: Make it 25 per cent. or 24 per cent.

Mr. Bottomley: Now I come to deal with some other points. I hope to cover all that were put to me. I made notes of them as fully as I could, and I am quite sure that hon. Gentlemen will make sure that I do not sit down without answering the points they wish me to deal with.
The right hon. Gentleman and other hon. Gentlemen asked why the Advisory Committee cannot be made into a tribunal and given statutory duties. I think it would be quite impossible in administration for the tribunal to sit on claim after claim; and the reason why it has been decided to deal with this by Order in Council is, quite shortly, that inclusion of statutory provisions in the Bill would make it virtually impossible to rectify mistakes in drafting which will only emerge as experience is gained of the claims received. Of course, I must again emphasise that decisions on policy are the responsibility of the Government.

Mr. S. Silverman: Will my hon. Friend allow me to interrupt? I can quite see that the Government may come to the conclusion that it would be better not to have a tribunal than to have one. It is a matter of argument on which opinions may vary. However, I do not quite see why my hon. Friend says it is impracticable when it was done precisely by such a body dealing with cognate questions and hearing them at the end of the First World War.

Mr. Bottomley: I am sure my hon. Friend will appreciate the difference between the circumstances prevailing today and those prevailing at the end of the 1914–18 war. At the end of the 1914–1918 war there was actually a peace treaty concluded and a German Government, and the assets in this country were more than enough to meet the reparations. The present position is that the assets in this country are not enough to meet the reparations. There is, in fact, no united German Government with which we can deal, and, above all, there is no peace treaty at present with the enemy. For those reasons, I think my hon. Friend must agree that the circumstances are entirely different.
The hon. Member for Chippenham appeared to feel that, because it had been

decided that a creditor should exercise his option to claim assets of a single debtor, and might not claim for a balance against the pool, that in some way lessened our share of reparations. That is not so, for the reason I have already indicated; it is doubtful whether we shall reach the full 28 per cent. to which we are entitled under the Reparation Agreement.

Mr. Foster: There really is a misunderstanding between the two sides of the House on this. Can the hon. Gentleman clear it up? It is impossible to get less than 28 per cent. from the Agreement. If there is £1 million we get 28 per cent. If there is only a shilling we get 28 per cent. The only instance where we get less than 28 per cent. is when the reparations are nothing, and then we get 28 per cent. of nothing. The hon. Gentleman keeps on saying that it will not reach the full 28 per cent. We are bound to reach the full 28 per cent. in any circumstances except where the reparations equal nothing. That is the point. It cannot be right arithmetically.

Mr. Bottomley: I agree that our share is 28 per cent. Now, at the present moment we feel we can get from the assets in this country a percentage of the total which may be less than that.
The hon. Member for Chippenham, and also, I think, the hon. Member for Northwich, made the suggestion that we were going to lose foreign exchange because of the measures that have been adopted. The answer is that it might have been so if, in fact, we could get some share from the other countries concerned. That is not thought to be likely.

Mr. Foster: Nothing?

Mr. Bottomley: I mean, that is the impression for the moment, and it does not in those circumstances look as though the question that has been put is one that will cause us as much concern as is felt by the hon. Gentleman. There was also a suggestion that enemy property against which there is a British claim, presumably whether established or not, should not be subjected to the realisation procedure. This is impracticable, and indeed might be unjust. We should not normally realise property if there were a claim established against it without first advising the claimant of the full facts. I think the right hon. Gentleman


will agree with me that we ought not to accept a positive written power to realise against the debtor if the British creditor has a good case against the debtor and could establish his claim in the courts against the debtor's property. These courts are, of course, still open to him to pursue his claim.

Colonel Dower: I should like an answer with regard to my question about bad management by the Custodian of the property.

Mr. Bottomley: I will come to that generally, but I was about to answer another question put to me. I was asked whether the amount of £3 million to £4 million which the Government would have under this settlement was in fact subjected to the same arrangement as that relating to the ordinary creditors. The answer is in the affirmative.
I think that I may now reasonably come to something which is not in the context of this Bill. The hon. Member for West Leicester (Mr. Janner) and the hon. Member for Nelson and Colne (Mr. S. Silverman) both dealt at length with the question of refugees, their properties and releases. The suggestion has been made that His Majesty's Government have been harsh in the way in which these matters have been handled. I would say that His Majesty's Government, as a member of the Inter-Allied Reparation Agency, have conformed to the rules of that body. I will quote from the rules:
Assets of any individual of German nationality: (i) who was deprived of liberty pursuant to any German law, decree or regulation discriminating against religious or racial groups or other organisation, and (ii) who did not enjoy full rights of German citizenship at any time between 1st September, 1939, and the abrogation of such law, decree or regulation, and (iii) who has left Germany (or if he has not left Germany at the final accounting under the Paris Agreement, it is proved that he intends to leave Germany within a reasonable time thereafter) to establish his permanent residence outside Germany; (iv) who it is proved did not act against the Allied cause during the war, and (v) whose case merits favourable consideration.
Provided a refugee complies with these rules, then the assets to which he has made claim can be released. So far as His Majesty's Government are concerned, I think that it will be within the memory of hon. Members that I answered a

Parliamentary Question dealing particularly with the method of handling these matters, and several hon. Members have in this House, and certainly outside, expressed gratitude for the generous way in which the Government were accepting and trying to work these particular Articles. I can only repeat that there are undoubtedly cases—some have been stressed this afternoon—where there are perhaps real difficulties.
I have told deputations of Members of Parliament and of representatives of outside organisations that His Majesty's Government are prepared to do everything possible to meet these cases. Indeed, I have been promised details of them, which I am still awaiting. I can only give this assurance: if these cases are presented to me with all the facts necessary to enable His Majesty's Government to give them the most generous consideration, that will be done, remembering that we are acting within the framework of this international agreement arrived at by these signatory Governments of which we are partners.

Mr. S. Silverman: I am very grateful to my hon. Friend for the spirit of the assurance which he has just given, and which, I am sure, will be accepted by everybody as being offered in complete good faith. I think that he was not in the House when I spoke, and that if he had been, he might have dealt a little more fully with the principal point which I made. Complaint was made about the rather narrow and artificial interpretation put upon these rules in a number of cases which had been decided, and, in the suggestion which I made to the House, decided wrongly because of that misinterpretation—that deprivation of liberty did not include enforced suicide, three days' imprisonment was not enough, and that kind of thing, which has resulted in unjust decisions which I am sure were not intended.

Mr. Bottomley: If any such cases can be presented to me, I repeat the assurance that I have already given that they will be carefully examined. I can only say that as yet none of these cases has been forthcoming in spite of my requests to the representative bodies which have made approaches to me. It is true that for a short time this afternoon when my right hon. Friend was speaking I was absent from the House, and I will take the


opportunity of reading HANSARD and learning more about what my hon. Friend had to say.

Mr. Silverman: I was not complaining. My right hon. Friend the Financial Secretary was present the whole time, and I think paid me the compliment of taking a full note of what I said. I only intervene again to assure him that all the cases which I quoted in the course of my speech are actual cases decided by the Custodian in the sense of which I complain. They are not imaginary cases; they are cases which have happened and which have been decided in that way on those grounds.

Mr. Foster: The Shanghai ghetto is an actual case, and it has been decided that two years in a Shanghai ghetto is not a deprivation of liberty. That seems to me to be nonsense.

Mr. Bottomley: I speak from memory, but I think that case was settled. I will look at it again and deal with it in precisely the way I have indicated to the hon. Member for Nelson and Colne. We are prepared to look at these matters whenever a reasonable case is presented which is worthy of our taking a decision in the general spirit I have indicated.
I am sure that there are many other technical points which could be raised. I think, however, that most of them would be more appropriate in the Committee stage. I ask the House to bear with me in trying to answer many of these points in simple terms, as compared with the legal thought which has been applied to them by many hon. Members this afternoon, and I hope that hon. Members will be content to give the Bill a Second Reading.

Mr. Douglas Marshall: I want to raise one point which has already been raised and not replied to and about which I feel that the hon. Gentleman could quite easily clear the minds of hon. Members. It is the case in which the wholly-owned German subsidiary of a British company had a payment made in this country which was collected by the agent of that company and paid to the Board of Trade. The Board of Trade then ordered that the payment should be made to the Custodian of Enemy Property, and therefore there arises a

specific sum of money owing to the British company which wholly owns the subsidiary company in Germany. Where exactly does that come in under this Bill and how will His Majesty's Government propose to deal with it?

Mr. Bottomley: It is precisely because questions of that kind cannot be answered in the way which the hon. Member for Northwich obviously wants them to be answered that we hope we can discuss them in the Committee stage.

Mr. Janner: Perhaps the hon. Gentleman will be good enough to give an answer to the point raised on Clause 8 (1) as to the meaning of the words "British protected person." It is rather a material point because it deals with a number of claims which are being met at present and which might be excluded by this Bill if that term were used.

Mr. Bottomley: I have not lost sight of that. It is a matter we shall consider. It is a legal term of art with which we cannot deal this afternoon.

Mr. F. Noel-Baker: I would remind my hon. Friend that I raised a specific point. Could he at least give me an assurance that he will give me the information on another occasion?

Mr. Bottomley: I can give the answer immediately. This firm was put up for tender; the highest bidder got the order, and it was in that way that it was sold.

7.11 p.m.

Mr. Drayson: I am still not satisfied with the reply the Minister has given on the question of control. I admit that it is a matter which could be considered by the Advisory Committee to which the Financial Secretary referred in opening the Debate; but surely this is something which could quite clearly be put in the Bill and should not depend upon any decision that may be arrived at by the Advisory Committee. If the question of control has been decided one way, the converse should also hold good. Therefore, where a wholly-owned subsidiary company of a parent company domiciled in this country had assets or balances in England on 3rd September, 1939, surely it can be decided that those assets could be taken over by the parent company responsible for the control of its wholly-owned subsidiary. I should


like the Financial Secretary to examine this to see whether, before the Committee stage, he cannot find some way of putting it into the Bill, rather than leaving this important point of principle to be decided by the Advisory Committee.
Another aspect of the speech of the Secretary for Overseas Trade which was distinctly disturbing was the way in which he dismissed the foreign exchange question. I can only assume from the answers he gave that he does not expect to get any substantial contribution from enemy assets outside this country to the general pool, but that in fact, after the various claims against definite assets have been established, we in this country will be making a greater contribution to the general pool than will be made by other countries who are parties to the agreement. I hope that by now the point regarding the 28 per cent. is clear in the mind of the Secretary for Overseas Trade. It will be within the recollection of the House that he said that we might get less than 28 per cent. I think we now appreciate that what he meant was that 28 per cent. of the amount available might be less than the amount required to satisfy all the claims we might put in against the general pool.
Those are the only two points I wish to raise now. There were a number of others with which the Secretary for Overseas Trade was unable to deal, but no doubt we shall have a further opportunity of discussing them in Committee.

Mr. D. Marshall: rose—

Mr. Speaker: The hon. Gentleman has already spoken.

Mr. Marshall: I have not spoken. I only asked a question.

Mr. Speaker: It was not a simple question. I thought it was quite a long question.

Question put, and agreed to.

Bill read a Second time, and committed to a Committee of the Whole House for Tomorrow.

Orders of the Day — DISTRIBUTION OF GERMAN ENEMY PROPERTY [MONEY]

Considered in Committee under Standing Order No. 84 (Money Committees).—[King's Recommendation signified.]

[Mr. BOWLES in the Chair]

Resolved:
That, for the purposes of any Act of the present Session to provide for the collection and realisation of German enemy property and for the distribution of the proceeds thereof, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament of any expenses incurred by the Board of Trade under the said Act, and
(b) the payment into the Exchequer of any fees recovered under the said Act, and of any sums paid by an administrator appointed under the said Act to any person acting on behalf of His Majesty's Government."—[Mr. Glenvil Hall.]

Resolution to be reported Tomorrow.

Orders of the Day — PUBLIC WORKS LOANS BILL

Order for Second Reading read.

7.17 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): I beg to move, "That the Bill be now read a Second time."
It is about 18 months since the last Bill of this kind was introduced, and on that occasion I said we expected that the amount the House was then willing to grant under the terms of that Measure would last until late 1949 or early 1950. I can only wish that I were always as correct in my estimates as I obviously was on that occasion. That Bill authorised £500 million, which could be granted by the Commissioners by way of cash advances, and a total not exceeding £680 million for cash advances plus commitments. The House will be interested to know how much of that has been expended and how much has been earmarked by way of commitments.
At the beginning of this month, actual cash advances had been £360 million, of which £285½ million havegone on housing, £14 million on education, £9½ million on public health, £44 million on gas, transport, land drainage and the like, and £7 million on stock redemption. The


balance in hand is, therefore, £140 million; that is the cash balance in hand of the £500 million. But the commitments which we have to take into account come to about £225 million. If those commitments are added to the £360 million advanced, the total is £585 million, which leaves only £95 million out of the £680 million I have mentioned.
As at the moment cash advances are being made at the rate of £8 or £9 million a week it is quite obvious that by about February or March the funds will be exhausted. We therefore come to the House with this Bill and ask for similar provisions to be made—that is, up to £500 million for cash advances and £680 million for cash advances plus commitments. In this connection, I would add that as soon as this Bill, if agreed to, becames law, all the commitments which have been made under the old Measure, together with cash advances about to be made, fall, and the commitments and cash advances still to be made will have to come out of the new amounts which this Bill grants.
Hon. Members might ask how a Bill of this kind marries up with the Government intention to reduce capital expenditure during the next year. The answer is that this is only an enabling Measure, and when we agree to the figures in this Bill, it does not mean that commitments will be made for these amounts during the current year. Applications for loans have to be sanctioned by the appropriate Departments before they go to the Public Works Loans Commissioners, and therefore it will be possible for the Departments concerned still to operate the policy of the Government on capital expenditure, in spite of the fact that we are agreeing to these further sums.

7.21 p.m.

Mr. Osbert Peake: These Bills have not, by custom or tradition, been made the occasion for a large review of our financial situation, but, in view of the very large figures involved compared with before the war, I am afraid it may be necessary, not tonight but on future occasions, to have a rather wider review of the powers of the Public Works Loans Board and of their operations than has hitherto been the case. The figures, of course, are stupendous compared with what they used to be before the war, when the borrowings of

local authorities from the Public Works Loans Board were limited to those authorities whose rateable value did not exceed £200,000.
The first point I should like to make, which is of some importance, is that we ought to try and get back to making these annual Measures. Before the war there was always one Public Works Loans Bill every Session, and the amount involved was between £20 million and £30 million. From that we could roughly estimate the amount of new expenditure on housing and so forth which the smaller local authorities were undertaking. Since then, the Public Works Loans Bills have appeared at very irregular intervals. We had two in 1945, one in March and one in October, the first authorising the National Debt Commissioners to advance £150 million and the second £250 million. There was then a period of something like 14 months, to December, 1946, when we had a further authorisation of £250 million, and seven months later, in July, 1947, we had another authorisation of £500 million.
As the right hon. Gentleman has said, it is now something like 18 months since the last Bill, and we are here authorising a further £500 million. It would be much more convenient if we could get back to having annual Bills, because we should then be able, more or less, to relate the figures to the below-the-line expenditure we now review at the time the Budget is introduced. The difficulty about this Bill is that there is no period specified which the money granted has to cover. It is not related to a financial year or to a calendar year. It may be compared to a father who, instead of giving his boy a regular quarterly or annual allowance, just says, "Here is £100. See how long you can make it last." That is what the Government are doing in the case of these Public Works Loans Bills.
I should like to see the Financial Memorandum set out the figures the right hon. Gentleman has given us in his opening speech. The Financial Memorandum, instead of giving us the informative information we require to enable us to appreciate the situation, merely refers to these small items of bankrupt farmers and small co-operative housing schemes which have met with misfortune and whose debts to the Public Works Loans Board have to be remitted.
I wish to refer on this occasion to one other matter which is of great importance. The Local Authorities Loans Bill, 1945, canalised all local authority borrowings through the Public Works Loans Board. Its purpose was to secure orderly postwar finance and avoid an ugly scramble in the capital market. As a quid pro quo, the local authorities were given the assurance that the interest rates at which they would be able to borrow should be approximately what the Treasury itself paid or might be expected to pay on its own borrowings. That assurance was given by the then Chancellor of the Exchequer, my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson), and also by myself when I occupied the same office at the Treasury as the right hon. Gentleman opposite.
The rates of interest were related to the length of the loan period, and the original interest rates varied from 2 per cent. for short-term loans to 3¼ per cent. for loans of over 30 years. These rates were reduced, of course, during the Chancellorship of the right hon. Member for Bishop Auckland (Mr. Dalton), and were subsequently increased in a period of financial stringency by the present Chancellor of the Exchequer. The long-term rate is now 3 per cent., which is, of course, far below the rate which the Treasury might be expected to pay on its own long-term borrowings at the present time. With 4 per cent. Consols touching par and 3½ per cent. War Loan down to 88 or 89, the Government are having to pay 3¾ per cent. for long-term borrowing at the present time.
It really is rather ridiculous for the Government, through the Public Works Loan Board, to be prepared at the present time to grant long-term loans to local authorities at a 3 per cent. rate of interest. It really amounts to this: that over and above the Government subsidy upon municipal housing schemes, there is at the present time, if new loans are granted, a further concealed subsidy by the rates of interest being charged.
The right hon. Gentleman said, perfectly correctly, that local authorities have to get the sanction of Government Departments and of the Treasury before they can proceed to obtain a loan through the Public Works Loans Board, but if he will look at the admirable report of

the Public Works Loans Board, he will see, at the bottom of the first page, the procedure laid down for obtaining loans by Government Departments. I should like to congratulate the Chairman, Sir Jeremy Raisman, and the other members of the Commission, one of whom I see is in his place opposite, on having secured the issue of this report so shortly after the end of the financial year. It is a most admirable document, and I recommend it to Members of the House. It goes on to say:
Exceptions to this procedure"—
that is the necessity to go to the Ministry of Health or the Treasury—
occur when a local authority desires to borrow from the Board in order to repay an existing loan obtained from other sources and no borrowing Consent is required.
Then if the right hon. Gentleman looks at page 4 he will see that of the loans issued during the calendar year 1948–49, something like £12 million was for the purpose of enabling local authorities to repay existing issues. It seems to me wrong, first of all, that the interest rates on loans are now so far below what the Government would have to pay if they went into the capital market that they thereby contain an element of subsidy to local authorities; and, in the second place, that local authorities should be able to raise new money at these absurdly low rates to enable them to discharge existing obligations.
It is perfectly true that the Treasury will have to look again at these interest rates, because the present situation is full of anomalies. I should like to give one example, which I think will impress hon. Members opposite. There are still, although I understand it is going to stop in the future, houses being built by private persons under licence for their own occupation. It is still possible for persons building their own houses to secure loans from their local authority to enable them to pay for their erection, and the rate of interest which they have to pay to the local authority is one-quarter per cent. in excess of the rate at which the local authority can borrow from the Public Works Loans Board. Even at the present time a man, who has saved some money with a view to building his own house, can borrow a similar sum of money required to construct and pay for the house at 3¼ per cent., and he can invest


his savings in long-term Government securities, which give him nearly 4 per cent. at the present time, thereby making for himself a clear profit at the cost of the Exchequer. I am quite confident—although I am perfectly well aware that the right hon. Gentleman cannot get up this evening and announce new rates of interest payable in connection with loans from the Public Works Loans Board—it will have to be looked at again in the very near future.

7.32 p.m.

Mr. Eric Fletcher: The right hon. Gentleman the Member for North Leeds (Mr. Peake) was good enough to refer to me as a member of the Public Works Loans Commission, and it is obvious from his remarks that he has been a keen student of the report from which he quoted, especially for the year 1948–49. I do not claim any personal credit for what is set out in that report, nor would the right hon. Gentleman expect me to comment on the observations he has made with regard to the interest rates laid down by the Treasury, at which the Public Works Loans Boards grants loans to local authorities.
Since the right hon. Gentleman has studied the report he will observe, as the Commissioners point out in their latest report, that the functions which devolve on the Public Works Loans Board are, in fact, of an extremely limited character. The House realises that when a local authority in these days wishes to borrow, it has to obtain the consent of the Government Department and of the Treasury for borrowing under the Control of Borrowing Order, 1947. The rather limited function of the Public Works Loans Board is to examine their credit and grant the loan, with the result that three bodies simultaneously, study the application from a local authority, and the Loans Board, in granting the loan in advance of the sanctioning Government Department concerned, the Ministry of Health or the Ministry of Education, make it conditional that such sponsorship shall be forthcoming.
We should all agree that local authorities have no possible cause of complaint at the way in which this machinery has, in fact, operated since the passing of the Local Authorities Loans Act, 1945. It is perfectly true that since that

time local authorities have, broadly speaking, been compelled to raise all their capital requirements from this one source. All borrowing has been canalised through this machinery, and to local authorities the results have been eminently satisfactory.
It is perhaps worth while on this occasion, in view of what the right hon. Gentleman has said, to refer the House to the observations made on pages 7 and 8 of the annual report. The Board point out that there has been no other possible source from which the local authority could raise money, and this has created at times some embarrassment for them. They say that when an application is received
where, in the opinion of the Board, the high rates or other adverse factors afforded doubtful security, the facts have been laid before the Treasury and the Board's views explained. The Treasury have then, in consultation with the Department responsible for approving the project, considered whether the proposed work was one which, in the public interest, must be allowed to proceed. In the two cases which the Board have referred to the Treasury the decision has in each case been that the work must be carried out, and the Board, at the request of the Treasury, have finally agreed to make the necessary loans.
Then there is a rather surprising fact:
No loan, therefore, has been refused since 1st August, 1945, to any local authority for any purpose which has been approved for borrowing by the sanctioning Department.
That, I think, reveals what the Commissioners would wish to draw to the attention of the Government and the House with regard to this procedure, because they go on to say:
The Board feel bound to point out that these functions have, in fact, been considerably restricted by Section 1 of the Local Authorities Loans Act, 1945. They feel that this is a matter which deserves serious consideration when the question of the extension of this Section of the Local Authorities Act, 1945, beyond 31st December, 1950, is under review.

Mr. Ellis Smith: Can they not be merged?

Mr. Fletcher: My hon. Friend asks can they not be merged. Reading between the lines, one may permissibly draw the conclusion that in view of the experience that has been gained by the operation of the Act during the last four or five years, the Government can and no doubt will


consider whether in future years there is any opportunity of simplification.

Question put, and agreed to.

Bill read a Second time, and committed to a Committee of the Whole House for Tomorrow.

Orders of the Day — PUBLIC WORKS LOANS (REMISSION OF DEBT)

Considered in Committee of the Whole House under Standing Order No. 84 (Money Committees).—[King's Recommendation signified.]

[Mr. BOWLES in the Chair]

Resolved:
That, for the purpose of any Act of the present Session relating to local loans, it is expedient to authorise the remission of unpaid balances of principal due to the Public Works Loan Commissioners in respect of loans to Braintree Co-operative Homes, Ltd., Murcot Co-operative (Housing) Society, Ltd., and George Thomas Willows."—[Mr. Glenvil Hall.]

Resolution to be reported Tomorrow.

Orders of the Day — CRIMINAL JUSTICE (SCOTLAND) BILL [Lords]

Order for consideration, as amended (in the Standing Committee) read.

Mr. Speaker: With regard to this Bill I have to call the attention of the House to the fact that the Standing Committee on the Bill by inadvertence extended the Bill by means of a new Clause and a new Schedule to the Isle of Man and the Channel Islands as well as to England, in respect of the removal of certain prisoners and certain other persons in detention. It will be recalled that the House on 24th October last gave the Committee power by Instruction to extend the Bill to England in certain respects, but gave no such authority in respect of the Isle of Man or the Channel Islands. It will therefore be necessary to recommit the Bill.

The Secretary of State for Scotland (Mr. Woodburn): I beg to move, "That the Bill be re-committed to the former Committee in respect of Clause 62 and Schedule 9."
This I do in accordance with Mr. Speaker's Ruling. I would add that a Motion giving an Instruction to the Committee will be put on the Order Paper for consideration tomorrow.

Lieut.-Colonel Elliot: We do not demur to this course. It is true that in the old days the Isle of Man was one of the Norse realms which had a close connection with Scotland, but we have never claimed any jurisdiction or connection with the Channel Islands. We do not want at this moment to show any aggressive or imperialistic tendency.

Question put, and agreed to.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Pearson.]

Orders of the Day — WAR DAMAGE (AMENDMENT) BILL

Mr. Ralph Morley: On a point of Order. May I call your attention, Mr. Speaker, to the fact that the War Damage (Amendment) Bill is on the Paper to be considered this day? It has passed its Committee stage and is on the Order Paper as Number 19. Should it not be considered before we go on to the Adjournment?

Mr. Speaker: No, I am afraid not. Our procedure is all in Order. When we get to "Supply, Committee" that is the end of the Business, so far as this House is concerned. We go on to the Adjournment.

Mr. Eric Fletcher: Would you be good enough, Mr. Speaker, to enlighten us as to how Members who are interested in private Members Bills which have passed their Committee stages, can bring them forward for consideration by the House upon an occasion like this, when Government Business has come to an end before the ordinary time of Adjournment?

Mr. Speaker: The answer is that hon. Members must persuade the Government to take up their Bills. There is no private Members' time now, and therefore one depends upon the good will of the Government. If the Government do not approve of a Bill, I am afraid that there is no other way.

Orders of the Day — HOUSING (MILITARY CAMPS)

7.45 p.m.

Mr. Solley: I desire to draw the attention of the House to the action of the War Office in refusing to make available to the Thurrock Urban District Council certain military camps in my constituency, and in particular the Orsett camp, which would make it possible substantially to ease the housing situation in Thurrock. I do not think that the gravity of the Minister's decision can be fully realised without an examination of the position in the light of the general housing position in my constituency and, speaking now personally, in the light of the promises which I made at the time of the General Election. I make no apology for referring to this matter, and since this is a question of the collective responsibility of the Cabinet I quite appreciate that the Under-Secretary of State for War will reply specifically to those parts of my speech which affect more directly his Department.
The policy which I and other Members of the Labour Party put forward in 1945 in relation to housing was set out in the Election document "Let Us Face the Future." It read as follows:
Housing,
said this document which I promised to implement to the best of my ability,
will be one of the greatest and one of the earliest tests of a Government's real determination to put the nation first. Labour's pledge is firm and direct—it will proceed with a housing programme with the maximum practical speed until every family in this island has a good standard of accommodation. That may well mean centralised purchasing.
Then it proceeds to say that if that course is necessary, as it was necessary to get the guns and planes,
Labour is ready.
I am under no misapprehension as to what would have been the position in housing had the Tories got into power. I am quite sure they would have landed this country into a dreadful mess. I am also certain that I made that specific promise in relation to housing. As from time to time I saw that promise becoming more and more difficult to implement because of the consequences on the home front of the foreign policy of the Government, I had to object. This objection, as many hon. Members know, led to my

ultimate expulsion from the Labour Party. If it had not been for the policy against which I protested, my constituents would, I believe, have been better housed. The logical conclusion to the foreign policy to which I object, in so far as it refers to housing, was that the Chancellor of the Exchequer on 26th October, when debating in this House the Government's proposals to deal with the economic situation, said that there would be a reduction in the current housing level from about 200,000 houses a year to about 175,000 houses a year.
In the light of the grave housing situation, I am satisfied that the statement of the Chancellor of the Exchequer calls for substantial comment, especially when he excuses himself by saying that it has also become necessary to limit the amount of dollar expenditure on the purchase of timber. He added that the quantity of timber which might be secured from non-dollar sources was uncertain. One of the reasons why I was critical of our foreign policy in the interests of my constituency was that I wanted timber to be purchased from the Soviet Union and Eastern Europe where it would not cost dollars. If that had been done even at this late stage, the cut from 200,000 houses to 175,000 houses a year would not have been necessary.
It is with that background that we approach the decision of the Under-Secretary in respect of the military camps in my constituency. I will first give some local statistics. I have been informed by the Clerk of the Thurrock Urban District Council that there are some 4,000 applicants waiting for houses in Thurrock, that the Council's rate of building is some 400 houses annually, and that two new names are added to the waiting list daily. That is merely a statement of statistics, but behind statistics one discovers human tragedy after human tragedy.
I have here a letter sent to me by one of my constituents which I shall read to the House without disclosing the name or the address of my correspondent. However, I shall be pleased to show it to the Under-Secretary if he is interested. This is the sort of thing which he is perpetuating by his action in refusing to permit the council additional housing accommodation which would be available in these camps. The letter reads:


My wife, five children and myself are living, eating and sleeping in one room. I am appealing to you for help of some sort. Everyone I talk to has never heard of such a case. My children are getting into a very bad state of health and the worry is driving my wife and myself to despair. I have appealed to the council again and again with no results. I would like you to send someone to see my one room, if possible.
That is merely one of many letters which I have received, each of which reveals the depths of despair to which many homeless families in my constituency have sunk. Young couples who would like to marry are prevented from doing so because they have no place where they can live. People who are already married are frequently forcibly separated because they cannot find a place to live in. I can imagine nothing more serious than the state of affairs which I have described.
Situated in that part of my constituency known as Orsett there is a camp where 500 of these tragic families could find almost luxury accommodation almost overnight, and yet the Minister says, "No, that must not be. The war machine comes before the human being." I confess that I cannot speak with first-hand experience about this camp. The reason is a little significant. I asked permission to inspect the camp. As a Member of Parliament, whatever my political opinions may be, I should have been given permission to inspect that camp and to ascertain whether what I was being told about it was true or not, especially as there are not merely Service men but children and married women living in the camp. I should have thought that the argument about security was pure poppycock, but that was the argument put forward by the War Office. They said, "You, a Member of Parliament, must not go to this War Office establishment, on grounds of security."
Fortunately, although the hon. Member for Thurrock was refused permission to go into this camp to which the wives and children of officers and soldiers serving in the camp have access, Colonel A. E. Loftus, who is a councillor of the Thurrock Urban District Council, got into the camp. I shall not say how he got in, but he did not get in officially. Having got in, he made his report to the local council. I have not got his actual words and therefore I do not guarantee

that I am putting the case as he would have put it, but the substance of what he said was that the Orsett camp was one of the most luxurious camps in the country. I believe it is common knowledge that more money was spent on it than on almost any other camp of corresponding size. Perhaps the Minister will correct me later if I am wrong about that.
The camp is a ready-made town. It has well-built brick huts, it has all the modern conveniences and services, and it could easily be converted for civilian habitation. Its floors are covered with luxury lino which in many cases is not obtainable by the general public. The officers' quarters are almost exotically furnished in their luxuriousness. I am not speaking now; it is the colonel. Taken all in all, they are premises which to the homeless of Thurrock would be as acceptable as perhaps an invitation to live in one or more of the more commodious country houses in or near Orsett. It is of some significance that the camp is capable of housing over 2,000 troops, and when I say that it could house 500 families from my constituency, I am putting it on the very conservative basis that four soldiers equal one family. However, in these difficult times I have no doubt that at a pinch 750 families could be housed in the camp.
The history of this matter in relation to the War Office arose in this way. About last April I was requested by the Urban District Council of Thurrock to assist them in arranging a deputation to the Minister so that they could put their case. This was not the first time I had raised the matter with the War Office, but having received an official request from the Thurrock Urban District Council, it was my duty to attempt to arrange the deputation. I was successful, and on 21st July the deputation awaited on the Under-Secretary. The case was put forward after I had introduced the deputation, and the final decision of the Minister was given in a letter to me dated 14th September. In the letter the Under-Secretary said that he had to adhere to his former decision of refusal. He said:
The whole of the camp should be retained for military use.
The Council did not ask for the whole of the camp. If I may criticise them in that respect, I think they were wrong. They


should have said that they wanted the whole camp. Their case was, however, that they would like part of the camp. The War Office said, "Oh dear, no. We do not care two hoots about your poor unfortunate families. You cannot have any part of the camp." I should have thought it would have been easy to rope off a small section of the camp. Indeed maps were produced showing that that could be done, but that argument apparently was of no avail.
In the same letter of 14th September I was further informed that the War Office was obliged to use much of the accommodation now vacant at Orsett Camp for conversion to quarters for families. I have been hearing that argument in relation to certain other camps also in my constituency, not merely since September this year but over the last couple of years. It would appear to be the case that whenever the War Office are asked to give up some of what I might call its ill-gotten gains, it says that it is in process of converting them for something or other. It would be interesting to know when that process of conversion began and when it will end, because it is an excuse that holds no water.
If the Minister has any difficulty about it, let me call his attention to the fact that if he will have a discussion with the Foreign Secretary he might arrange for the 7,000 American airmen now occupying magnificent quarters at Burton-wood kindly to remove themselves from this country where, in my view, they are not wanted by the majority of the citizens, to have a general shuffle round, and then it would be found that the homeless of Thurrock would be able to some extent to occupy the camp of Orsett. I say to the Minister and, through him, to the Secretary of State for Foreign Affairs that, as far as the homeless of Thurrock are concerned, they do not care two hoots for the American airmen in this country. They do not want the American atom bombers here. They would be pleased if the American atom bomb civilisation took itself off to its own country. Do not let it be said that we are hard up for quarters. The answer to that is, kick the Americans out and let Britishers take over.
Secondly it is about time we stopped spending something like £900 million a year in preparation for the third world

war. It is time the people of Thurrock who cannot get houses were given houses and the policy of the Government in this respect changed.

Mr. Walter Fletcher: It is time the hon. Member sat down.

Mr. Solley: I know it does not appeal to hon. Gentlemen opposite who have their country houses and their clubs. I know they want an atom bomb war. But the people for whom I speak do not care two hoots about appellations of "cryptos" and "fellow travellers." They want homes and peace. I know they would back me up and, indeed, they back me up 100 per cent.

Mr. E. L. Gandar Dower: They would not appreciate some of the hon. Member's views.

Mr. Solley: There are a number of detailed matters which I wish to put to the hon. Member who is to reply. First, I should like to know the precise purposes, which so far have not been disclosed in writing, for which this camp is used. I understood that at the time of the docks dispute there was a suggestion that soldiers who might be used in Tilbury Docks in the event of trouble—and no one is more pleased than I am that there was no trouble—were to be installed at Orsett Camp. I tell the Minister here and now that the people of Thurrock and the homeless of Tilbury do not want soldiers to be put into Orsett Camp and used against the dockers in any eventuality.
If, on the other hand, it is to be used as a transit camp—and I should like to know whether that is the Minister's intention—again I say that the people of Thurrock are not interested in transit camps as a preparation for the third world war. They are too near the atom bomb front and they do not like it. My third question is: can the Minister give me precise figures of the number of soldiers who have occupied this camp month by month in the last two years? It is suggested that from time to time this camp is nearly empty and at other times it appears to be reasonably full.
Finally, I call the attention of the Minister to one or two other War Office establishments. There is Abbotshall, Stanford-le-Hope. This is owned by the War Department, and here again we are


told that it is being converted for married quarters. The War Office tell the local authorities that they cannot have it for civilian housing. When did this conversion begin, how much has it cost, when will it end and when does the Minister think that soldiers will go into Abbots-hall? If his plans are that, should a third world war start next year, he will use it next year, let him say so. If it is still empty, as I am told it is, let the people of Thurrock have it.
The next War Office establishment is Bucklies Camp, South Ockendon. In this case I hope the Minister will be a little more accommodating. The trouble there is that a game of shuttlecock is being played by his Department and the Ministry of Health. There is a suggestion about a loan from the War Office to the Ministry of Health. I plead with the Minister to examine this question with his colleague the Minister of Health and not allow the urban district council to become the victim of a shuttlecock system between one Department and another.
Then there is the Chadwell St. Mary Camp which we are told is also being converted for married quarters. I ask the same questions: when did the conversion begin, if it ever did, when is it proposed to end, and how many married people are now living there on the instructions of the War Office? We in Thurrock would like to know.
My concluding question is about the Purfleet Garrison. I have received tragic letters from families there who are being evicted on to the cold stones by his Department and they are not interested in the slightest degree about the desirability of having extensive accommodation for the military. They want homes. They deserve homes. I promised at the General Election to do what I could to give them homes, and that is why I am taking up this attitude now.
I appreciate the difficulties of the Minister. They are not of his own making; they are the result of Cabinet policy which gives priority to bombers over homes, to guns over houses, to military camps like Orsett Camp rather than to the homeless of Thurrock. But even within the limits of this Cabinet priority system, cannot the hon. Gentleman do something, if only temporarily, to make available to the Thurrock Urban

District Council some of this tremendous potential accommodation so that to a substantial extent the housing difficulties of Thurrock can be alleviated?

8.10 p.m.

Mr. Emrys Hughes: I have a great deal of sympathy for the hon. Member for Thurrock (Mr. Solley), because in my own constituency I have had precisely the same difficulty, and what I may say in this Debate may, perhaps influence the War Office in taking up a more sympathetic attitude than they have done previously.
The hon. Member has said that 4,000 people in his constituency are waiting for new houses. Most of us in Scotland have far bigger lists than that.

Mr. Ellis Smith: And in England.

Mr. Hughes: Recently in my own constituency we had precisely the same set of circumstances as the hon. Member for Thurrock has described, with an empty military camp in the neighbourhood of a mining town which had a very grave housing problem. The camp had been empty for something like 12 months and there had been various rumours that it was to be handed over by the War Office to the local authority. Naturally, inhabitants of the nearby mining area became very curious to know when they would get into the camp. Negotiations with the county council continued for a considerable time, and the council had even gone to the length of drawing up a list of prospective tenants for the huts which formed the camp.
Suddenly, news came from the War Office that all the negotiations were off and that the camp was still to be required for military purposes. As a result, of course, considerable dissatisfaction was aroused, and one afternoon in the House I received a telegram from my constituents saying that the local miners had invaded the camp and asking me to come immediately to help to ease the situation. I deliberately kept away from the camp in case it was suggested that I had instigated their entry into the camp. I had done nothing of the kind; I never attempt to encourage people in disobeying the letter of the law. After waiting a fortnight, I received a further telegram to say that still more people were in the


camp. On returning to my constituency I found that it was in the occupation of the local miners, many of whom had seen long service in the Forces.
I want to give one or two illustrations to show the complete anomaly of the housing situation in relation to the military situation. I went to interview the camp committee and asked, "Have you any ex-soldiers who think they have a case?" The next thing we heard was that all these people had had a notice that they were to be prosecuted for trespassing in the camp. The camp was run in a very orderly fashion by the people, who were called "squatters" but did not merit that name, and at least a dozen had served on all fronts during the war. I had men who had served in the Royal Air Force with distinguished records; men who had been on convoys, in France and at El Alamein. I went to the police court to defend them, and I put the case before I brought the men into court. I said, "These men have had years and years of fighting for King and country, by air, by sea and by land, and I submit that it is not just to evict these men from their homes at a time when the housing situation is so bad."
I will say this for the War Office. When these facts became clear, after a good deal of pressure by me on the Secretary of State for War, the right hon. Gentleman withdrew the eviction notices; and the men are still in the camp. I suggest that the same consideration which the War Office showed to the camp at Pennylands, near Auchinleck, in Ayrshire should be extended to the homeless people who are now demanding homes in the neighbourhood of Thurrock. I am quite sure that the hon. Member for Thurrock could take a cross-section of the 4,000 people of whom he has spoken and find men with distinguished service records who had fought on all fronts.

Mr. Solley: indicated assent.

Mr. Hughes: What irony it is that when people return after giving six years to their country they are without homes in which to house their wives and families!
On other occasions the War Office have not been quite so considerate. I admit that the Secretary of State and the Under-Secretary try to approach these

human questions in a friendlier spirit than did previous War Secretaries, but we have a certain ground of complaint against the attitude taken up by the War Office towards soldiers who have given up a quarter of a century of their lives to the Service and are living in married quarters. I am sorry that the hon. and gallant Member for Ayr Burghs (Sir T. Moore) is not here to testify to all I have said. The War Office very often take up a very heartless and brutal attitude towards these people who are still living in married quarters, and the time comes when the War Office—after considerable warning, I know—evicts them on to the street. The cases which I shall quote will show the drastic need of a complete change of heart by the War Office towards these people.
One day, outside the barracks at Ayr, I found four families who were homeless. Their belongings had been thrown out of the barracks and their furniture was covered by tarpaulin sheets, which had been given them not by the War Office but by the charity of a travelling showman. For 13 weeks the War Office let those four families lie out in the rain, refusing to do anything for them. One of the men was actually on the clerical side of the local Territorials; and although he had been in the Army machine for 25 years, his belongings were thrown outside the barracks and no provision was made for him.
That is a heartless way to deal with men who have been in the Army for 25 years. It is not a sufficient excuse to say that the quarters they occupy are needed for other people. Surely it would have been a gracious act by the War Office, if hutted accommodation was not available, at least to have given them a few tents. Actions of this sort create the attitude that, "You can give your life to your King and country, but at the end of the day what will be done about housing accommodation for you?" It is ironical and a remarkable commentary on our social system that people who entered the Forces on the plea that they were to defend their homes are without homes after giving a quarter of a century of their lives to the Service.
I do not know how the housing problem is to be solved if there are to be any economy cuts in housing. In the Debate last Friday I quoted figures showing that


every unit of a man, wife and three children is now called upon to pay 28s. 6d. per week for defence, but less than 2s. for housing. The hon. Member for Thurrock has now quoted figures that 4,000 people with their families are having to pay 25s. per week for defending homes which they do not possess:
We must try to face the question of housing as it relates to the functions of the War Office. It has been argued very firmly that we need accommodation for Service men, and I will not deny for a moment that if men are called up, they are entitled to all the shelter and amenities of life. But at present building labour is being taken out of industry into the Forces and being used for goodness knows what—certainly not for building. I suggest that a partial solution to this problem would be that, so long as our housing conditions are so bad that men who have served in the Forces for six years cannot get homes, there should be an end to this policy of calling building workers out of the building industry and putting them in the Services.
I have read articles recently by distinguished military ex-officers which reveal that today generals are cursing conscription because it provides more men than they really need. I suggest that it is reasonable to ask that building workers should not be called up and that building apprentices should be allowed to remain in industry until the housing problem has eased. I am sure that I carry with me in this matter my colleagues from the West of Scotland, who realise how acute is our housing position. We need apprentices to be trained to be plumbers, plasterers and joiners, to build houses. That should be a priority No. 1 task. We hear a lot about our commitments in Malaya, Hong Kong, Africa, and in other parts of the globe. But priority No. 1 is the housing front at home. Long before certain right hon. Members became Cabinet Ministers, and interested themselves in these commitments, they went round saying that housing was definitely a priority.
We have been told that housing should be a military operation. At the rate things are going in Scotland today—and the Under-Secretary is also expressing alarm in this matter—I can see that operations on the housing front will last for another 20 years. I wonder what the War

Office would say about military operations in any sphere that were likely to drag on for another 20 years. We need to mobilise all our building resources to provide homes for our people. The operation on the housing front is going too slowly.
The Government ought to pay special attention to the urgent commitments we have for clearing slums and building new houses in our towns and in the countryside. They are just as important as our commitments in Hong Kong, Malaya, Aqaba or anywhere else. I want to see military camps used for civilians, and not solely for soldiers. I am sure that if conscripts especially could have their say, they would say "Our commitments are primarily to the working people of our country, who are shamefully housed in slums and overcrowded dwellings. That is priority No. 1, and we must not allow any Government to forget their responsibilities in that direction."

8.27 p.m.

Mr. E. L. Gandar Dower: I am sure that everyone here will wish to support the hon. Member for Thurrock (Mr. Solley) in his plea that the Secretary of State for War, and indeed the heads of the other Service Ministries, should make certain that such camp accommodation as is available should be used where possible for housing purposes. There are in Scotland not only aerodromes—with which we are not particularly dealing at the moment—but military camps which have housed German prisoners, displaced persons and recalcitrant Poles and which should be carefully examined with a view to housing the people.
The Government are well aware of the contents of "Let Us Face the Future." I never believe that it is a good thing to try to make party capital out of an Adjournment Debate, but I am certain that the people of this country will shortly say to them "You must face the past on this question of housing." I am sure that no one is more disappointed than the Government that more has not beer done to achieve the laudable intentions which they announced when they took office.
We in Scotland feel that the problem of housing in Scotland is ultra-desperate. Anyone seeing the housing conditions in


the outlying parts of Caithness and Sutherland, and other vast agricultural areas in our country, would realise how dismal it is to contemplate the progress of housing at its present rate. Although it is not appropriate now to plead for the removal of restrictive practices, such as laying only a certain number of bricks in a certain time, I think that building workers should work from dawn to dusk to catch up with housing arrears. I support the hon. Member for South Ayrshire (Mr. Emrys Hughes). It is most unfortunate that building workers and apprentices should be called up for the Forces when workers are more urgently needed at home. I appeal to the trade unions to relax their restrictions on building operatives.
I draw attention to the neglect to derequisition camps and buildings on aerodromes. I hope shortly to be raising the question in regard to an airport which I know well. Within my knowledge, at Aberdeen Airport there are no fewer than 40 or 45 rooms which have been standing empty for more than five years, and a farmhouse which I own was requisitioned in 1939 and has been allowed to degenerate into a chicken run and piggery.
I think it rather sad that on a matter of housing there are not more Members of the Opposition present, while the complete absence of the Liberal Party obviously shows that they do not consider housing as a matter of importance in the coming General Election. I do not wish to go into party questions, but I hope that what the hon. Member for South Ayrshire said will be considered very solemnly and that no hutted accommodation or camps will be wasted, in view of the tremendous demand for housing and the abysmal conditions in which people live—conditions which would apply a strong temptation to any hon. Member of this House to take possession of premises against the law if he were homeless.

8.31 p.m.

The Under-Secretary of State for War (Mr. Michael Stewart): My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) has intervened in this Debate to raise a topic which is a favourite one with him and which I have answered before in this House. The hon. Member for Thurrock (Mr. Solley) will forgive me, since it is a somewhat

separate topic from that which he raised, if I first address myself to the points raised by my hon. Friend the Member for South Ayrshire.
My hon. Friend laid particular stress on the fact that it does happen from time to time that the War Office are obliged to take eviction proceedings against civilians who formerly have been soldiers and who are living in army married quarters. My hon. Friend described those occurrences with all the eloquence and feeling of which he is a master but he omitted certain important facts, of which I can hardly think he could be unaware since I drew his attention to them the last time he and I were speaking on this matter in this House.
First, the responsibility for housing civilians is quite naturally not a War Department responsibility. It is the responsibility, in the first instance, of the local authorities, and it is noteworthy that in certain areas in the country where there are military or naval establishments and where this problem arises some local authorities have found it possible to give us help in dealing with this problem. They say that we can arrange to put on their lists and provide accommodation for a certain number of the men who have to leave Service quarters every month. Where that has been done we have got some way towards a solution of the problem.
The reproaches of my hon. Friend the Member for South Ayrshire ought to be directed not so much against the War Office and Service Departments as against local authorities who have not been so co-operative in this matter.

Mr. Emrys Hughes: Does the hon. Gentleman realise the colossal problem that affects local authorities? The town council of Ayr, which is not my town and is a Tory town, tried every possible device to find housing accommodation for these people. They completely failed and, in face of that, I maintain that it was a heartless action on the part of the War Office to throw those people out.

Mr. Stewart: I was saying that there are local authorities who have been co-operative on this problem and, if every local authority were as co-operative as some are, this problem would not be of the dimensions it is. When my hon.


Friend says that it is a heartless action, has he no heart for the people we put into these houses? To judge from the way he and the hon. Member for Thurrock have spoken, one would imagine that as long as a man is a soldier he is to be described as part of the war machine and any action taken on the part of the War Office to provide him with a house is harsh and overriding a civilian need. Once the soldier has left the Army, once he is a civilian—and despite the fact that there is a civilian local authority responsible for housing—it is then and only then that hon. Members are prepared to invite our sympathy for him.
While we must all have great sympathy for people who suffer from the present housing shortage, whether they be Service men or civilians, it is surely both justice and common sense that where there is accommodation which belongs to a Service Department and which has been provided out of moneys voted by Parliament for that Service Department, we ought to use it in the first instance for men who are actually in the Forces. All that I am saying would, I agree, not carry very much weight if we proceeded in a hasty or reckless manner. Hon. Members know very well, however, because this is not the first time that this problem has been discussed in the House, that from the time when a man ceases to have any entitlement to a Service quarter months, and in some cases years, elapse before we require him to vacate it.
It is only in the last extremity—and, in some cases, when we have reason to believe that if we show willingness to proceed with eviction civilian accommodation will be found for him, whereas if we are patient we shall be required to continue being patient and see that quarter misappropriated indefinitely—that, with the personal sanction of the Secretary of State for War, we proceed with eviction. Therefore, when we say, as we are obliged to say from time to time, "This quarter is War Department property; our first responsibility is actually to the man in the Services rather than to a civilian but, admitting that first principle, we will none the less not rush hastily into eviction but will proceed cautiously, patiently and with humanity," as indeed we have proceeded, I do not think that we deserve the strictures which my hon. Friend has passed on us.
I now turn to the beginning of this Debate. I do not know whether the hon. Member for Thurrock was gratified but he must at all events have been surprised at the variety of subjects introduced into the Debate, and at the surprising variety of support which he has collected for his attack on the Government. It is not the first time that united fronts have made strange bedfellows. In the first instance the hon. Member for Thurrock developed a considerable attack on the policy of the Government in general and addressed many observations to me which he hoped I would pass on to the Foreign Secretary.
It would be undesirable in this Debate to go into that major issue which was raised by the hon. Member. That would to some extent he a repetition of the Adjournment Debate of last Friday on the cost of defence which was initiated by the hon. Member for South Ayrshire. The hon. Member for Thurrock said that we ought to be devoting a far lower proportion of the national resources to defence purposes of any kind in order that we might devote more to housing.

Mr. Solley: I did not quite say that, I did not put that gloss upon it. The Minister refers to "defence purposes," I put it rather differently—"preparation for the third world war."

Mr. Stewart: I was using the phrase "defence purposes" as it is commonly used in this House. The hon. Member takes the view that the military expenditure of this country is preparation for a third world war. What does he say about the preparations of other Powers, which consume a much larger proportion of their national income and production than does our expenditure on defence in this country, as I pointed out to the hon. Member for South Ayrshire last Friday? If one compares the amount of its resources which this country spends on defence with that spent by certain other powers, it cannot be said that any charge of aggressive intent or deliberate preparation for war could be levied against this country. Hon. Members who are anxious—as I take it we are all anxious—to see this country delivered from what is no doubt a very great burden of military expenditure will, if they consider the problem rightly, realise that much of their addresses will have to be made, not to the Government of this country, but elsewhere.
I do not think that either the hon. Member for Thurrock or the House in general would wish me to pursue that point at great length. The hon. Member was more concerned with what he called the action taken by the War Office in refusing certain camps in his constituency and the neighbourhood, and particularly Orsett camp. I would invite the attention of the hon. Member to this point. He speaks of the action taken by the War Office in refusing certain camps. He appears to start with the initial assumption that if there is in any area a military establishment, there is naturally a prima facie case for handing it over for housing purposes; and that it is the immediate duty of the War Office to do so unless they can produce a defensive case why they should not.
I wonder if he will apply that criterion to many other types of accommodation, public and private? If, to take as an example, we were to discover somewhere a large building occupied by persons employed in the working of the football pools, could he say that any overcrowding and any housing problem in the neighbourhood was directly due to the action of the football pools in having the premises as their business premises and not allowing them to be used for housing? That is what the hon. Member is saying in regard to the War Office. He takes the view that the purposes for which the War Office exists, and for which military camps exist, is by any criterion a completely useless and worthless purpose. If that is the point he is making, and that I daresay is the view taken by the hon. Member for South Ayrshire, then we reach a field where argument is useless. But I do not believe that most people will take that view.
Let us look at Orsett camp in particular. The hon. Member for Thurrock mentioned the figure of 2,100 soldiers who could be accommodated in that camp. But we must point out that that is purely a theoretical figure. It depends on the assumption that every piece of accommodation in that camp is used entirely for housing, as places where the soldiers will actually sleep. If we were to put 2,100 soldiers into that camp there would be no buildings left which could be used as offices of any kind, or which could be used for medical purposes, or lecture rooms, or for instruction or recreation.

It is only on that assumption that we could get 2,100 soldiers into the camp. When the hon. Member for Thurrock suggests that, on this assumption of putting 2,100 soldiers into the camp, we could therefore put 500 families into it I doubt if he would carry many people with him. It is the nature of families that they do not consist of people of the same age and sex.
If these families were put into the camp on that basis they would find themselves living in barrack room accommodation, as soldiers live in a barrack room. Once we had attempted to provide the reasonable degree of separation and privacy which, even at the lowest standard would be necessary, it would not be possible to put anything like 500 families into the camp, even if we took up the whole camp which, as has been pointed out, the local authority did not ask. When we look at the fact that there must be some buildings for instructional purposes, medical rooms and the rest, the accommodation comes down to that sufficient for about 1,700 soldiers.
Then we have to notice that this camp has to meet, both in the summer camp period and at week-ends, a Territorial Army commitment. That commitment takes away accommodation for about another 400, and leaves us with possible accommodation for about 1,300 soldiers. When, as a result of the representation of the hon. Member for Thurrock, I visited the camp the number actually occupying it was about 900. It is now in the neighbourhood of 1,000. The real gap between what this camp could accommodate if it were full and fulfilling its T.A. commitments and what it is now accommodating is a matter of about 300 soldiers, though I shall show that a hole has been knocked even in that figure since the matter was first examined.
Even the bitterest critic of military arrangements will agree that it is not possible so to arrange War Office accommodation that every piece of it is 100 per cent. full at any one moment. It will be recognised that if we are to fulfil the duties that the nation requires of us, men must be sent to various places in this country and overseas. Men must be sent as reinforcements, and other men must come back home. At any one moment, if we are to have moderate elbow room for such movements, there is bound to be


a certain amount of vacant accommodation. In fact, the vacant accommodation at Orsett amounts to about one-fifth to one-sixth of the total. We could increase the number of soldiers in the camp by about 20 per cent.
When I had examined this matter, and when I had received a deputation from the Thurrock Council, I did not feel entirely satisfied with the use that was being made of the camp, and I visited it personally. At this point I would comment on the description of it as a luxurious camp. That is a description which appeared to be based largely on the fact that there was linoleum on some of the floors. I am bound to say that good linoleum is hard to come by today. It is a very attractive material to have on a floor, particularly if otherwise one would be walking on bare stone, but I have never regarded the presence of linoleum as evidence of the almost sybaritic luxury which my hon. Friend described. This is good accommodation. It is decidedly above average when I compare it with some of the accommodation in which, unfortunately, we are still obliged to ask soldiers to live. I am extremely glad that we have some camps like Orsett where the accommodation is above average.
It became apparent when I visited the camp that we were keeping a greater cushion of vacant accommodation than was really necessary, but it was also apparent that if we were to abandon that and to turn it to any other use, there was one use which cried out for priority, and that was that the accommodation should be converted into married quarters for soldiers. It would have been quite inadmissible to hand over this accommodation for civilian housing while there was still a responsibility for the housing of soldiers which we had not fulfilled. Following upon my visit, arrangements were immediately made for the conversion of some of the vacant accommodation to married quarters. That work is now proceeding rapidly.
The present situation at the camp may be summed up in this way: There are some 297 buildings in the camp of which 221 are fully occupied by troops; 25 are in process of being turned into married quarters and shortly another 14 will be converted; and 37 buildings remain empty and not committed for married

quarters. The latter buildings are required in order to fulfil the Territorial Army requirements which I mentioned earlier.
It cannot be maintained, therefore, that we have recklessly and extravagantly allowed useful accommodation to stand idle in face of the undoubtedly serious civilian housing problem. I was obliged to conclude that it was not possible to help the hon. Member for Thurrock or the local authority in its problem of civilian housing by offering them the whole or part of Orsett Camp. To have done so would have meant interfering with the training of the Territorial Army, cutting out altogether the accommodation provided for certain military units which had to be in the neighbourhood, and interrupting part of our important programme for the provision of married quarters.
I might add, in view of what was said by the hon. Member for Thurrock, that if the London dock strike had continued, it might well have been necessary to use the accommodation at Thurrock, but I would say not to house soldiers for use against the dockers. If the hon. Member had been a little more successful in helping to prolong that dispute, to the impoverishment of this nation, it might have been necessary to move large numbers of troops, and we should thus have required some of that accommodation.

Mr. Solley: I was not one of those who was responsible for the continuation of the dispute; on the contrary, I urged that the dispute should be terminated almost immediately after it started by isolating the ships in dispute. The hon. Gentleman should not introduce this red herring, but should keep to the path of the Debate.

Mr. Stewart: I am introducing the topic of the London dock strike because it was introduced by the hon. Member himself, and the attitude he took in it is well-known to hon. Members, who will be able to judge whether my description was or was not correct.

Mr. Pritt: The hon. Member had nothing to do with it from beginning to end.

Mr. Stewart: That, I think, was not his own view of the matter.
It was not possible to meet the hon. Member on the lines that we should make over the whole or part of this camp, but it would be wrong to say that we have ignored the housing difficulties of Thurrock. The hon. Member mentioned certain camps which are now being turned into married quarters. Well, that work of conversion is proceeding, and that is a good reason why they cannot be handed over to civilian use. What the hon. Member did not mention were certain camps in the neighbourhood which have been transferred entirely or handed over on loan for civilian housing. He mentioned in particular Bucklies Camp, and, as I informed him for the information of the Thurrock Council some months ago, we should be willing to consider lending that camp to the Ministry of Health for use by the local authority for civilian housing, and we invited the civilian housing authority to take the necessary steps to that end. If, since then, any administrative difficulties have arisen, I would be glad to accept the hon. Member's suggestion and do my best to resolve them.
I ought to mention, since the hon. Gentleman has not done so, the Bucklands Camp at Tilbury and the Belmont Camp at Grays, both of which are lent to the Ministry of Health for civilian housing. Two camps at Purfleet were transferred outright from the War Office some time ago. This illustrates that we have not been blind to our duties and that we are not holding on to accommodation unnecessarily. What is being suggested by the hon. Member for Thurrock is not merely that we should, wherever we can, transfer, but that we are in fact obliged to hand over any accommodation which any civil authority may require. If we did that, it would be impossible for us to carry out the responsibilities which this House and the nation require us to meet.
Finally, I put this question to the hon. Member: What is it that he and his constituents are saying? Are they saying "We do not want this country to have any military preparations at all"? If they are, it is at least consistent, though I doubt very much whether that is what his constituents are saying. Are they, then, saying "We are agreed that there should be an Army, that there should be soldiers and that they should be housed, but it must be done somewhere else where

it cannot possibly inconvenience us"? I do not believe his constituents would be so lacking in public spirit as to take up either attitude.

Mr. Solley: Since the hon. Gentleman has asked me a question as to what my constituents have been saying to me, may I tell him? What they have said to me from time to time is that they appreciate that it is necessary for our country to have adequate Defence Forces. For that purpose, they appreciate that it is necessary to have camps, and they also appreciate that the increasing expenditure on the Army would be quite unnecessary if we did not pursue a foreign policy that involved all these commitments. These camps, such as that at Orsett—

Mr. Deputy-Speaker (Major Milner): The hon. Gentleman really cannot make a second or third speech. He may be entitled, as the Minister gave way to him, to intervene for a moment, but he certainly cannot make another speech.

Mr. Solley: I was asked a question, and, with respect to the Chair, I ought surely to be given the opportunity of answering the question?

Mr. Deputy-Speaker: I think the question was more rhetorical than anything else.

Mr. Solley: Then it should not have been put in that way.

Mr. Stewart: I think the hon. Member has answered it plainly enough, though it remains to be seen whether his constituents will take the view about the Government's foreign policy which he attributes to them.
In conclusion, I would draw the attention of the House to the camps I have mentioned in this neighbourhood which we have made over for civilian use, and which were not mentioned by the hon. Member for Thurrock in the presentation of his case. I believe that if they are kept in mind, it will appear that we have tried to discharge our responsibilities while maintaining a proper balance between our duty to provide for the defence of the country and for the adequate accommodation of soldiers, and our duty not to be unreasonable in face of civilian difficulties and distress in regard to housing.

Mr. Solley: Before the hon. Gentleman sits down, may I ask him two questions? The first is, in order to put the matter into proper perspective, will he say how many soldiers were housed in the camps handed over to the Thurrock District Council compared with Orsett camp, and, secondly, in view of his statement about the conditions in Orsett camp, would he be prepared to permit me to visit that camp in order that I might satisfy myself that what he has now said meets the situation? May I have an answer?

Orders of the Day — STERLING BALANCES

8.58 p.m.

Colonel Crosthwaite-Eyre: I am grateful for the opportunity to raise tonight the matter of sterling balances and sterling area reserves. This is a subject which has been discussed many times, but as the months go by it becomes ever more urgent to try to get from the Government some statement which is not purely designed to obviate any commitment on their part.
We have now come to a situation in which hesitation on the part of the Government is no longer possible. The Chancellor of the Exchequer has made it quite clear that, whatever room we may have had in the past for latitude of movement, it does not exist now. On our current actions the future of this country will be decided. In his speech on devaluation, the Chancellor made it quite clear that it was no longer possible for anyone either on this side of the House or on the Government side to burke the issue any further, and that we have to do something concrete, immediate and effective.
My purpose in raising this subject tonight is to hear from the Government how far the very right challenge made by the Chancellor has been carried out by the Government. I think it can be shown that, far from the Government meeting any one of the challenges mentioned in that Debate, they have, as in the past, burked every issue. They have made no decision and have contented themselves with a number of pleasant platitudes which, however agreeable to their own back benchers, have done absolutely nothing to meet the requirements of the situation.
I will start by reminding the House of one or two things. When the Chancellor

made his speech on devaluation, he said that the rate of 2.80 at which the £ was to be devalued was the ultimate limit, and that it was impossible for anyone to say that the rate could go lower. Indeed, he stressed that he had fixed this rate in the belief and on the assumption that no one, either on the basis of normal commercial transactions or on what he called black market transactions, would want the rate to go lower than that which he had fixed. But, in fact, as is known by the right hon. Gentleman the Financial Secretary to the Treasury, who I believe is to reply, the rate of the £ is now 30 cents lower in New York than the official rate, and is now down to 2.50.
The question I want to put to the right hon. Gentleman relates to what I think is the crux of the present situation. His Majesty's Government have failed throughout to make two simple decisions. They have failed, in the first place, to try to settle what we call sterling balances, but what in fact are debts arising out of the war. They have always paid lip service to settling these debts but they have never done anything to settle them. On the other hand, they have always been willing to enter into any bilateral agreement which may suit their purposes for the moment, but which may have the gravest consequences on the economy of this country. I want to try to develop those two points tonight.
I want to remind the House—I think this is valid—of a statement made by my right hon. Friend the Member for Woodford (Mr. Churchill) who, speaking in the devaluation Debate, said:
Although his personal honour and private character are in no wise to be impugned, it will be impossible in the future for anyone to believe or accept with confidence any statements which he may make as Chancellor of the Exchequer from that Box."—[OFFICIAL REPORT, 28th September, 1949; Vol. 468, c. 168.]
We have had a very good example of that today in a Question which I asked about the proceeds from the sale of Indian manganese. I asked whether those profits accrued to the sterling area dollar pool. I am the first to admit that that Question was badly framed. The Question which I put down on the Order Paper was not one which, on the face of it, would attract the attention of the Chancellor of the Exchequer to the point I wished to raise. On the other hand,


I am certain—and I think the right hon. Gentleman will agree—that the point in that Question was perfectly clear; it was manganese.
The Chancellor of the Exchequer rode it off in one way or another. He quoted my Question in terms which enabled him not to admit the true situation. I must admit that possibly I was not quite candid in my last supplementary question which was deliberately designed to get from him a reply which would show the true position. I think that the only construction that can be put on the Chancellor's replies to me today was that the profits from the sale of manganese in relation to the sterling area dollar pool were not the subject of consideration in the latest talks between the Indian Government and the United States in Washington, because in fact all the proceeds from the sale of manganese last year as well as this year were granted to India for her own use. If that is so, it raises this immediate problem. For one reason or another we have granted many releases from the sterling balances, not only to India but to other countries, and every single one of those releases has meant either a drain on what we produce in this country or, alternatively, a withdrawal from our hard currency reserves. Of all the countries so concerned, India has been the most beneficially treated. She has had the best possible terms.
Now we have the present case, where the Chancellor, through his undoubted ability, is able to ride off a Question when, in fact, all it can mean is that not only in this current year but in the past year one of the prime products which India can sell to provide dollars for the sterling area has been used by India with, presumably, the concurrence of the Treasury for the benefit of India herself and not for the pool. We find ourselves granting these enormous releases to India, which cannot be justified on any terms of equity, and at the same time finding that the Treasury agreed to allow her to use one of her prime exports not for the common benefit but purely for her own benefit. If there is any determination on the part of His Majesty's Government to defend sterling—and I hope there is—there can be no worse example of what they have permitted in the past than this.
Perhaps I am being slightly hasty, but we have only to take the question of the recent release to Persia. There, for what reason I know not, the Government agreed to pay Persia £5¾ million for the use of the Persian railways during the war. I have no idea on what basis that sum was agreed but one thing I do know, as I think does every hon. Member—if it had not been that we moved materials through the Persian railways in order to support the Russian front, Persia would never have maintained her independence. It is difficult to name any country in the world where our direct contribution was more responsible for safeguarding her future than it was in the case of Persia. Yet, what happens? We find ourselves with a debt of £5¾ million. I know not how that was agreed or who agreed it.
The situation is even worse than that, however, for at the same time His Majesty's Government not only agreed the debt, apparently without any question of counter claims for defending Persia, but they also gave a guarantee that if we devalued the £ at a later date, then His Majesty's Government would indemnify the Persian Government against that devaluation. Thus, instead of owing them £5¾ million, we now find His Majesty's Government paying them £8 million, because of devaluation.
The story does not even finish there, because that £8 million is not even a charge on our own productivity. It is not a charge purely on what we ourselves may be able to provide but, in the terms of the agreement, the whole of that £8 million may be used at the discretion of the Persian Government either to purchase from ourselves, within our own area or from the dollar area. Therefore, the whole of that £8 million which, whatever the computation, is purely a sum incurred by this country in the defence of Persia, has become now a charge on our dollar reserves. I suggest to the right hon. Gentleman that for His Majesty's Government to allow the Persians to get away with that sum is something which cannot be justified in any sense of equity.
We have heard a great deal about the sums demanded from every industry in order to send goods to hard currency areas. The one thing that stands between us and disaster is our ability to earn dollars in the markets abroad, but if there is one thing that stands in the way of


those markets it is His Majesty's Government. Their policy of releases of sterling balances makes it not only difficult but almost impossible for our own efforts to bridge the gap between our present insolvency and what we all want to see—this country standing on its own feet.
The Financial Secretary will find it hard to deny that if he analyses the figures of last year's trading he will discover that something like one-fifth of everything that we exported was sent abroad without any payment to this country at all. It was sent abroad solely because His Majesty's Government, under one agreement or another, had released sterling balances to enable foreign countries to purchase from us. I know that the right hon. Gentleman will say: "What else could we do? We had to make some sort of agreement." Of that great sum of £3,000 million which represents our war-time debts, there was not a single item that was agreed to under the Coalition Government.
What was agreed to then was that when times of peace came and a settlement could be made between the creditors or owners of the balances on the one hand and His Majesty's Government on the other, it would be on the basis of who had done what to support our war effort. It would be made between ourselves and places like Egypt, Argentina and India. There would be a just settlement. The Financial Secretary and the Chancellor of the Exchequer have made statements time after time that when these debts were raised and an opportunity offered, something would be done. The fact is that they have done nothing. For the last four years these debts have been drawn down upon us and our resources raided, purely to enable countries whom we had defended to live on a better standard than our own.
The same thing is true today. The exchange rate of 2.80 was the limit, we heard from the Chancellor of the Exchequer, to which we would go, but now it appears that in Paris and New York that rate is at a discount because the foreign investors believe that it is no longer necessary to earn sterling. They have only to go to His Majesty's Government to get it free on one pretext or another. Who can blame them when they see the latest agreement giving the

Persians £8 million for nothing? We are making no counter-claim for what we have done for Persia. Think what we have done for Egypt in helping her during the war and what we are paying in settlement. So far as any ordinary observer can see, His Majesty's Government have not the slightest intention or inclination to try to make sterling balance in the markets of the world.

Mr. Ellis Smith: I am sorry to interrupt the hon. and gallant Gentleman. I have listened to him very closely. I should like to know what action he proposes should be taken and what action he would have taken.

Colonel Crosthwaite-Eyre: That is a very fair question. I was just coming to my peroration, but if I may interrupt it in order to answer the hon. Member, the answer is what my right hon. Friend the Member for Woodford has said from this Box. All these debts incurred during the war were not an obligation of this country to meet, but, because of the very nature of the war, something which we had to incur but which, when the days of peace came, would be adjusted between ourselves and every other country concerned on the basis of what effort the countries concerned had put into the war.
Purely on the financial side, we might find that we owed the Egyptians £300 million or £400 million, but on the other hand, because we defended Egypt with the Eighth Army, there was a certain claim on our side. We should then take the two claims and adjust the balance to determine whether Egypt owed us something or we Egypt. I can safely say that for all sterling balances that is our view. Without reference to who has done what or who has achieved what, all these debts have been accepted by His Majesty's Government, and instead of our finding ourselves today in a position in which we can build for the peace, we are striving to settle the war.
When the Financial Secretary or his right hon. and learned Friend say that devaluation has achieved something, they know full well that it can achieve something only if the terms of trade turn with it to our advantage. The right hon. Gentleman must know that sterling is now below the terms which the right hon. and learned Gentleman set in the devaluation Debate. Where do we go


now? Are His Majesty's Government anticipating another devaluation. If not, how are they going to defend sterling? How can the right hon. Gentleman expect to defend sterling when he grants these enormous sums to the Persians, the Indians and other countries? It just does not make sense. Either sterling has to be a currency which enables a valid commercial transaction or it is a token at the whim of His Majesty's Government. Sooner or later the Government have to answer this: are they going on making these releases and gestures, reducing sterling not to a means of international trade but to something purely at the discretion of the Government, or are they by a firm policy and a realistic decision going to make sterling what it was in the past, a valid international currency? That is the decision which only the Government can make.
I suggest to the right hon. Gentleman that the time has come when it is useless for him, the Chancellor or any other Member of the Government to come to that Box and utter a series of platitudes which convince no one. What we want is action, and I hope that at last the right hon. Gentleman will give us at least a symbol of that action.

9.19 p.m.

Mr. Walter Fletcher: I am delighted to have this opportunity of saying a word about sterling balances for, as the right hon. Gentleman and other hon. Members may recollect, it is a point which I have brought to the attention of the House steadily for nearly three years. I feel a good deal of sympathy for the right hon. Gentleman because he has now to stand up and answer for the sins which were committed by the present Chancellor of the Duchy of Lancaster. It was during the epoch—

The Financial Secretary to the Treasury (Mr. Glenyil Hall): Most of our troubles today are due to the fact that we had years and years of Tory Government.

Mr. Fletcher: I hardly thought that in a Debate of this sort a party point of that "Let us face the past" nature instead of "Let us face the future" would be introduced. Because I think the matter is so serious and because this is an economic point, I shall certainly eschew that form of argument and shall not follow that path.
There is no doubt that an examination of the speeches and arrangements made in settling the war debts shows that the present Chancellor of the Duchy took a view parallel to that which he took on the spending of the first dollar loan. His refusal to take the advice of anybody on the convertibility clause was one of the great causes of reducing our present sterling balances, and his financial policy was an ebullient one based on vicarious generosity with money from the pockets of the people.
I really feel sympathy for the right hon. Gentleman and also for the present Chancellor who have inherited the position regarding sterling balances, which was undoubtedly one of great difficulty. However, I feel that it was only recently that they connected up the financial implications and the financial arrangements with the true meaning of sterling balances and their settlement, which is the direct diminishing of the amount of goods manufactured in this country that are available for importing raw materials and food. The fact that the Chancellor of the Exchequer, in the speech he made on devaluation, for the first time really came out into the open on that point was good and healthy and rather encouraging to people like myself who have been flogging away at this point for so many years.
Yet we are now beginning to have some doubt because we have not yet seen the action which would back up the protestations made by the Chancellor that something was really to be done about it. When the Chancellor comes down and speaks here, he nearly always makes what I call a speech of the seven veils. We have to tear away veil after veil—fortunately, possibly not the last one—to try to get at what he is always trying to hide. I would try to impress on His Majesty's Government on this question of sterling balances and unrequited exports, which is now becoming a burning question in the country, the need for taking the public into their confidence more. Now that it is realised by the working man that possibly half a day's work a week of everyone concerned in the export trade is being given to paying war debts, which are real obligations, there is no doubt that this has become of greater interest than before. I can vouch for it from my experience in my own constituency.
One of the pleas I have put forward on many occasions, and should like again to put forward now, is for the monthly figures and statistics to begin to show the true position. We are told by responsible Ministers inside and outside this House of our precarious economic situation, but if, every month, we were to be told in plain figures the true position, if the export figures were not boosted and at the same time we were told what proportion of them are bringing back nothing in return, this would not be a discouragement to the people of this country but a real incentive—not of the material order—because people are beginning to realise more and more that the mere fact of devaluation will not prove a panacea and is no true lifebelt in the stormy economic seas in which we are precariously floating. The 2.80 rate is like the Maginot Line—it is not there to defend us, as the French so wrongly thought; it is there for us to defend.
When we see our sterling balances in jeopardy, when we see the slowness with which the Government are tackling that problem, we are entitled to feel nervous. In the world in which I spend most of my time, in which we deal with commodities of every sort, the effect of devaluation is disquieting at the moment. The big dollar earners are not the manufactured goods from this country, but the commodities from the whole of the Empire: wool from Australia, gold and hides from South Africa, and tin and rubber from Malaya. There is a whole list of them, which the right hon. Gentleman knows too well. If he will take the average dollar price, not the average sterling price since devaluation, I think he will find that on balance there is not an increase in dollar earnings. Sterling balances translated into unrequited exports are, therefore, taking away from us not only dollar-earning power, but power to keep the machinery of industry going.
I am the first to admit that it is an extremely difficult problem; that if by some miraculous mischance I were to find myself in the position of the right hon. Gentleman, I should not find it very easy to tackle the question of war debts. We cannot in any sort of circumstances think that this country would wish to repudiate those debts, and nobody on this side, as far as I am aware, has put forward

such a proposal. There is a great distance between repudiation and a round-table discussion between debitor and creditor out of which might come an arrangement which would allow the parties to continue and over a series of years reach a better balance, but we see very little sign of that. The Prime Minister of India, Mr. Nehru, has been here. Was the opportunity seized to discuss this very difficult and ticklish point? We know quite well that this affects the economies of other countries, that it cannot be settled by a unilateral overnight decision. We also know that the disturbing effect that devaluation without previous sufficient consultation had in the Empire—in India, in Pakistan—is not being repeated in this case.
I urge on the right hon. Gentleman in all seriousness, in view of the facts which he knows much better than I—because I can see only one small section of the world in which I move—that because the sterling balance and the dollar gap situation are disquieting, the great urgency to deal with the sterling balances situation must be ever present. If he or the Chancellor were to come to this House and say either, "I have summoned a general conference"—which might be one method, but a difficult one—or "I have achieved a new settlement with one country on sterling balances"; if there was one sign of real progress; if there was anything but the sort of attitude which the Chancellor took this afternoon with my hon. and gallant Friend the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre), which is really one of arrogant contempt that anybody should dare to wish to find out what the Chancellor is doing, what is going on and what sort of action he is taking—an attitude which has produced great resentment not only on this side, but on the other side of the House and outside it—if I say, there was really some sign that a real attempt was being made to tackle a difficult question, in which everybody would wish to assist in every way, there would not be the same anxiety that we might again have to face a further devaluation.
The history of other countries—of France and a great many others—shows that it is useless to pretend and persist in the attitude that "It can never happen to us." It has happened to us, and we have not felt the full effect of it yet. I


ask the right hon. Gentleman when he replies not to pour scorn or to make the sort of interjection which he made just now, but to try to reassure not only this country on a subject in which an increasing number of people are informed and interested, but other countries, whose assessments of the value of sterling and of the correctness of the financial policy of this country are really what govern the future of sterling. If he will give tonight a sober account of what is being attempted; if he will say, "You must be patient for a little longer, but we are really tackling these questions seriously," it would be rather more reassuring than anything we have received from the Chancellor of late or from the Government Front Bench in reply.
It is far too serious a question, and he knows it perfectly well, to take any other line. It is not primarily a financial question, but is a question of goods, manufactured goods—and the possible increase of the flow of food and raw materials through new arrangements. Every time the Government and everybody else in this country exhort each other or ourselves to greater effort, we should bear in mind that a high proportion of that effort is now flowing out with no direct advantage to our economy. That situation cannot persist if we really hope to see sterling balances have a real meaning, such as they have had in the past.

9.31 p.m.

Mr. S. N. Evans: This is a very important and interesting subject and we owe a debt of gratitude to the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) for raising it.
I find myself taking a different view from that of the majority of people on the matter of sterling balances. I thought there was a suggestion in the remarks of the hon. and gallant Member that if it came to a showdown we should repudiate these balances, but that seems to me to be a queer way of trying to restore confidence in the £. It ought to be understood that countries like India, enduring an infinitely lower standard of life than we British, will be very reluctant to see what they regard as legitimate debts owed to them for goods and services supplied during war, written off. There are in India, I suppose, 350 million people

enduring a very low standard of life, and there can be no doubt that the exports we are sending to India in settlement of sterling balances are playing an important part in building up the Indian economy.
I take the view that this country has no future tied to the dollar. I accept fully that there is no escape from the short-term need for dollars, but I think that everything we do must be designed to emancipate ourselves eventually from the need for dollars. Therefore, I do not think we can consider this question of sterling balances in a vacuum. A nation's economic and financial problems collectively constitute a diamond of many facets and the sterling balances are only one facet. These sterling balances are in fact acting as a very effective cement within the sterling area during a very difficult, but we hope transitional, period of British rehabilitation.
We have no future tied to the scarcest currency in the world, and I do not think there is much possibility of the world getting back to economic and financial health so long as the lubricant is the world's scarcest currency. Therefore, when I approach the question of sterling balances I think in these terms; that this country has no future and no financial or economic independence except as the administrative and financial headquarters of a group of nations each faced with this dollar problem, each determined to be rid of it and each with complementary economies. The question of the sterling balances must be judged in relation to that analysis. I believe it to be very important that this sterling area should be kept together pending the time when we get back on to our own two feet and can once more act as the banker to this area, which would be independent of the dollar.
I believe that in buying time for us to achieve that position of banker to the area which I contemplate, these sterling balances are very important in respect of the countries which are beneficiaries of the sterling balances. These sterling balances are our debts, we owe the money, and if we wanted to argue about them the time to have done so was when they were incurred. I repeat that we owe the money, and I believe that in this difficult transitional period in which we are getting back to our old position of acting as banker to a large part of the world's


economy, which was and I believe will again be based on sterling, the sterling balances are playing a very important part in holding that sterling area together.

Mr. Ellis Smith: I have a good deal of sympathy with what my hon. Friend is saying, but I should like to have his view on one point. We may lose some bargaining power if we wholly accept the position which he takes up. To give one concrete example, the enormous balance which India is claiming from us is for services which we rendered during the war.

Mr. Evans: But that is not the view which they take. It would be all very well if this were a world in which affairs were conducted on the basis of the principles of the Sermon on the Mount; there would then be some chance of attaining acceptance of the point of view of my hon. Friend the Member for Stoke (Mr. Ellis Smith). The fact of the matter is that if there had been an idealistic or even a fair approach to the problem of war debts, this country would owe nothing, because everybody knows that in the recent war against Fascism we poured out our blood and treasure to an extent out of all proportion to our strength. That is the cause of our weakness at the moment. But the Americans, whose country is the richest in the world, although they have made considerable assistance available to us—and I should be the last to be lacking in gratitude for that assistance—have not accepted the position which my hon. Friend the Member for Stoke is suggesting that India should accept in relation to ourselves.

Colonel Crosthwaite-Eyre: I think the hon. Member is wrong. If he will look at the Bretton Woods Agreement, which was the first major Anglo-United States Agreement after the war, he will see that it is specifically laid down in Article 10—I speak from memory—that we should scale down these, debts to a just proportion as one of our obligations under the Bretton Woods Agreement.

Mr. Evans: Yes, but that cannot be done unilaterally. There is a borrower and a lender; there are those who have received the goods and services and those who have supplied them. We really cannot restore confidence in the £ on the basis of repudiating our legitimate debts.

Mr. W. Fletcher: I am certain that the hon. Member does not wish to give a wrong impression. No one is suggesting repudiation, but exactly the opposite. Would he say which course he thinks would most cause confidence in sterling—to continue to service these debts at a rate which in unrequited exports will lead us to disaster or to try to make an arrangement to scale them down in the same way as America has done in relation to ourselves?

Mr. Evans: I am not here arguing that there should not be some scaling down of these debts. What I am arguing is that these debts cannot be scaled down without the willing consent of those to whom we owe these large sums of money. It will be within the knowledge of the hon. Member for Bury (Mr. W. Fletcher) that up to now the Indians have strongly resisted any suggestion that these debts should be scaled down, and the Indians, of course, are the owners of the largest portion of these sterling balances.

Colonel Crosthwaite-Eyre: I am sorry to interrupt the hon. Member again, but will he admit that His Majesty's Government, under the Bretton Woods Agreement, undertook the responsibility to scale down the debts? It may be that the Indians in the main are unwilling, but the Government undertook the obligation to scale them down.

Mr. Evans: His Majesty's Government could not accept such an obligation—

Colonel Crosthwaite-Eyre: They did, under the Bretton Woods Agreement.

Mr. Evans: Debts cannot be scaled down unilaterally. Debts can only be scaled down on the basis of a freely-negotiated agreement between the two parties to the contract. It may be that the Bretton Woods Agreement included a provision whereby we said that we would endeavour to negotiate a scaling down with the people to whom we owed these sterling balances, but that is the very most that the Bretton Woods Agreement—

Colonel Crosthwaite-Eyre: If the hon. Member will look at the Bretton Woods Agreement he will see that it was not a question of whether we would attempt to do this or that, but that we would undertake a just scaling down.

Mr. Evans: The hon. and gallant Member's persistence astounds me. How can we scale down debts entered into freely—in abnormal conditions, I agree? They did not ask us to have the goods and services. We asked for them.

Mr. W. Fletcher: The hon. Member says they did not ask. Was he in India during the time when they were crying out for our help?

Mr. Henry Usborne: Before the hon. Member answers that question, does he realise that the Indians say we declared them to be at war without their consent, and that they have not forgotten that yet?

Mr. Evans: Do not let us get drawn into splitting hairs. I would not accept that the Bretton Woods Agreement could include a clause which compelled us unilaterally to scale down these debts. After all, that would be the very negation of financial standards so far as I know them and as they have been practised in the City of London for generations. I am surprised at the suggestion that the debts should be unilaterally scaled down without regard to the wishes of those to whom we owe this money and what they regard as their legitimate interests.
I do not wish to pursue this any further, except to say that I believe that this question requires very much more study than it has had. I believe that the fact that we have capital equipment going into India in payment for these sterling balances, even though they be unrequited, will have a profound influence on the trading relationship between the 350 million inhabitants of India and this country in the years to come. I believe that the question of whether British equipment goes in now or whether United States equipment goes in now, is of profound importance to the future wealth of this country. Therefore, I would not be a party to any undue pressure on those to whom we owe these balances.
There are two ways of looking at this matter. Some of my hon. Friends may care to examine this thesis which I have put forward, that this country has no future except as the administrative and financial part of an association of nations which is faced with this dollar thraldom and which is determined to be rid of it. If they consider this matter in that light, it may well be that they will accept my

contention that in this transitional period the sterling balances are acting as a very important cement, consolidating together the countries constituting the sterling area, pending our return to a position in which we can once more act as bankers to the world on a pound sterling basis.

9.45 p.m.

Mr. William Shepherd: I wish that I could share the complacency of the hon. Member for Wednesbury (Mr. S. N. Evans). He must be unaware of the real position in which this country finds itself if he puts forward the idea that by sending goods to the sterling area without return, we can improve the position of the sterling area. What in fact is the difficulty with the sterling area is that it cannot get sufficient dollar exchange. If we send out to the sterling area, to markets that are easy to obtain, goods which might have been sent to the dollar area, then we are postponing the day on which we shall get economic equilibrium between the dollar and the sterling areas. I should have thought that a glance at that problem would have made that point clear to the hon. Gentleman.

Mr. S. N. Evans: Will the hon. Member tell us what unrequited exports we are now sending to India which the Americans would be prepared to buy from us?

Mr. Shepherd: I should have thought that quite a lot of the things now sent to India could be sold, if not to America, then to Canada. I do not think that even the hon. Gentleman would deny that proposition. I was most surprised to hear the extraordinary denials made by the hon. Gentleman of the statements made by my hon. and gallant Friend the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre). The hon. Gentleman suggested that there was no obligation on the part of the Government at the time of the American Loan Agreement to scale down these balances. This is the first time I have heard such a denial. I hope that the Financial Secretary to the Treasury will not fall into the same mistake. What was arranged in relation to these balances at the time of the Washington Loan Agreement? It was arranged that the balances should be dealt with in three parts. It was arranged, first, that we should cancel as much as we could get cancelled; secondly, that


we should make a small proportion available in all countries in all currencies; and, thirdly, that we should enter into some long-term arrangement to fund what was left of the debts. Not one of these points has been met since the end of the war.
The real culprit in this case is the culprit in so many other cases. It is the right hon. Gentleman who is now Chancellor of the Duchy of Lancaster. I do not like to keep hitting at a man who obviously is somewhat down, but it is perfectly true to say that his neglect is weakening sterling at this very moment, and that no attempt was made—and, until a few weeks ago, no attempt has in fact been made—to lessen the enormous drain upon this country which sterling balances or debts really represent.
I should like to try to get this issue into perspective and to say that we cannot consider alone the issue of sterling balances. We cannot divorce that from our international economic and social obligations, and I would not attempt to do so. We certainly cannot divorce it from what we have already tried to do, and have in fact done, for other countries throughout the world. Only a short time ago the Financial Secretary gave an answer which showed that, during the years since the war we had granted assistance overseas in terms of sterling and in kind to the extent of something like £1,000 million. Really, we must ask ourselves whether a nation proudly impoverished as a result of two world wars in rapid succession can bring upon itself this enormous burden. I suggest that we cannot, at the same time as we give this vast aid overseas of £1,000 million, give also so freely of our sterling balances. I suggest that that is something which is quite beyond the economic capacity of our country, and that the right hon. Gentlemen who occupy the Treasury Bench are directly responsible for this difficulty.
We on this side of the House may not always have our facts exactly right, and, if that is so, it is due to the secrecy with which the Treasury surrounds all these matters. I know the old stock argument that, this country being the bankers of the sterling area, the Treasury must not give away the details of the

accounts of our customers, and I am sure that my hon. Friends subscribe to that view, but we could be given more details than have been made available to us. We have to work on the calculations by the National Council of Foreign Trade in the United States, and if that National Council can make these extraordinary guesses, it ought to be the job of the Treasury to publish something which is authentic to enable the people of this country to know where they stand.
I want to know whether it is true that between one-fifth and one-sixth of our exports are now, or have been in the past year unrequited. If so, that is a most serious indictment of the Government. I recognise that we have certain obligations to these countries. I recognise that we have our obligations to try to put the other countries in the sterling area on their feet, and that, to a certain extent, putting them on their feet will restore the sterling area and make it more rapidly a viable entity. Although we have these moral and economic obligations, I still say that we have gone too far.
We are arousing very considerable suspicion in the minds of the Americans, because our American friends take a very different view of the matter. What they have thought of our attitude towards the sterling balances it that it is not the attitude of a Government which wants to get rid of them. They think that the Government are anxious to keep them because they are a means by which the Government are keeping a grip on world trade. They believe that we are purposely adhering to these balances and making no effort to scale them down simply because we want to keep the trade in our own hands. I must say that there is some justification for this view, because it can be said, and I think not unfairly, that this business of exports in the sterling area and the sending of huge quantities of unrequited goods, is in fact a means of maintaining full employment.

Mr. S. N. Evans: Is that a thing to which the hon. Gentleman would object?

Mr. Shepherd: I do not want to go into all the ramifications of that argument, because time is too short, but it is true to say that many of the goods which have been sold to sterling area


countries would not have been sold to them had those countries not had free and easy access to sterling. If the hon. Member opposite wants to query the validity of my argument, let me say that every export, except that of coal, of which we cannot get enough, has a substantial element of import in it. The policy pursued by the Government in that regard is definitely against the national interest.

Mr. Evans: I do not think I can allow the hon. Gentleman to get away with that one, because a milling machine or a machine tool that might run into big money, perhaps £2,000 or £3,000, need not contain within itself one pennyworth of material derived from the dollar area.

Mr. Shepherd: Really, we cannot segregate items which have a high conversion value, such as a milling machine, and imagine that they are representative of the whole field. Obviously, as my hon. and gallant Friend says, there is a low conversion rate in the case of textiles.
I want the Financial Secretary to tell us something more now that we are having secrets revealed, if after answering two Debates he is not too tired to go into details. I want him to say how far at the present moment the sterling area is a liability to us in terms of dollars. How far are we allowing countries in the sterling area to spend money on all kinds of things which we in this country are denied? I have a very strong feeling that, with the exception of Malaya, which has an enormous net credit, the sterling area is involving Britain in a substantial dollar burden.
What steps are, in fact, being taken? We know, for example, that in many of the countries in the sterling area petrol is unrationed, and that all kinds of imports are being permitted for which we as a nation have to bear the ultimate dollar responsibility I have been driven to the conclusion—although I must say that I have not examined it very closely—that the sterling area seems at the moment to be a liability to us, and unless the Government really take the matter sternly in hand and see that Ike do not suffer a loss, we shall not be able to continue on the present basis.

Mr. Ivor Owen Thomas: Is the hon. Member suggesting that we should strengthen the sterling area by repudiating unrequited exports?

Mr. Shepherd: I think we went over this when the hon. Gentleman was not here, when I tried to show what, in fact, we had undertaken to do, and what the right hon. Gentleman the Chancellor of the Duchy of Lancaster had completely failed to do. It is that view which I want to impress upon the Government today. Let us remember that at the time of the Agreement, the Americans were prefectly happy to wipe off 30 million dollars of debt, and they expected us to do likewise. We have not done so. Moreover, we are paying, as far as I know, one half per cent. per annum on those debts. That is an additional drain upon the resources of this country.
I suggest to the right hon. Gentleman that this matter has been grossly mishandled by His Majesty's Government. There has been almost criminal neglect in this regard. I frankly confess that it is not much use talking about this issue at the present time because the time for action has passed. As usual, the Government try to do everything too late. If within six or 12 months of the end of the war they had done what they agreed to do, and what hon. Members on this side urged them to do, a scaling down of these debts would have been perfectly practicable. It is not so easy today because, to use the phrase of the Secretary of State for War, nobody cares a "tinker's cuss" what we did for them during the war.
All the burdens that have fallen upon this country, all the strain involved upon sterling, and all the difficulties which now face us when we try to get convertibility, which must be the goal of this nation if it is to restore itself as a great trading nation, arise out of the failure of the Government to do what they undertook to do in the Washington negotiations—to achieve the scaling down of the sterling balances which now hang round our necks and which other countries very properly say they will not have from us.

It being Ten o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]

Mr. Shepherd: This is one more example of the manner in which His Majesty's Government have let the


country down, and I hope the country will be mindful of the Government's neglect in a few months' time.

10.1 p.m.

Mr. Scollan: I listened with great interest to the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre), but I am not yet convinced that he meant the discussion to centre around the question of sterling balances at all. He dealt at great length with devaluation and its cause. Listening to hon. Members opposite, I have come to the conclusion that there is some confusion in their own minds about this matter. The hon. Member for Bury (Mr. W. Fletcher) is definitely against convertibility—he said so—whereas the hon. Member for Buck-low (Mr. W. Shepherd) is in favour of it. I do not know whether they could make up their minds.

Mr. Shepherd: Would the hon. Gentleman allow me?

Mr. Scollan: I am sorry, but time does not permit. Let us see exactly where we are getting. The Labour Government, which actually negotiated the loan with the United States after Lend-Lease was cut off, are the villain in the piece, according to the Opposition. The Americans, we are told, are now looking with suspicion at these sterling balances and also at the Labour Government for using the sterling balances to shut them out of the markets in the sterling area.
There may be some truth in that suggestion and there may not be, but do not let us forget that the Americans themselves were responsible for inserting the convertibility clause in the Loan Agreement. They insisted on convertibility, and immediately the countries with sterling balances discovered the convertibility clause they began to order goods from America and passed the bill on to us. This Government then froze the sterling balances and said, "We are not going to have convertibility," The American Government then stopped the loan of £938 million. [Laughter.] The hon. Member for Bucklow obviously does not know anything about the subject.
The purpose of the convertibility clause in the loan agreement was to enable the sterling balance countries to trade on it. It was deliberately put there; the loan

was running out and the Government had to freeze the sterling balances. The result was that the Americans then clamped down on us. Why cannot we face up to the issue? [Laughter.] There are none so blind as those that will not see. It is always possible to find something to laugh at, especially if one does not understand it.
We are now heading towards a second devaluation, for exactly the same reason as the first one, because certain sections in this country and in America are determined to undermine the credit of this Government and destroy it. The "Sunday Express" very blatantly published that certain insurance companies were paying 2.30 instead of 2.80 to the £ for dollars. Why are they doing that? On 24th May the chairman of the Chase National Bank was over here and Arthur Webb, correspondent to the "Daily Herald," sent a report to the "Daily Herald" saying that the common talk in America was that he was over here looking for a Ramsay MacDonald to bring down this Government. The common talk in America was that they would have to undermine sterling for the purpose of bringing down this Government because there was a chance of a General Election and the people of this country might send this Government back at that election.
It is time that some hon. Members in this House got down to the question of what is undermining confidence in sterling. It is not the sterling balances or the unrequited exports about which we have been told. Right behind sterling we must have gold, silver or commodities, and this country has neither the gold nor the silver; but we have the commodities, with only a small gold reserve to tide us over an emergency.

Mr. W. Fletcher: What commodities?

Mr. Scollan: All kinds of commodities. The products of the whole industry of this country. That is what we have behind us. Some of those who are laughing will not be laughing in three or four months' time when someone comes forward again and says that the people of the other countries in the world have lost confidence in sterling and that one can buy it in the markets at two dollars instead of 2.80. If that sort of thing is permitted to continue, on the basis of undermining sterling, then obviously this country cannot continue.
With great glee the hon. and gallant Member for New Forest and Christchurch told us that sterling was being quoted at 2.30. What was the idea? That confidence in sterling was falling because of this Government. That is the campaign—a deliberate campaign—and it is not engineered only by hon. Members opposite. It is the great financiers, the insurance companies—and the chairman of the Chase National Bank was one of the gang—and the crowd who are deliberately determined to bring down the credit of this country and destroy the Socialist Government. That is the plot. Now this very innocent-looking Member for New Forest and Christchurch comes into the House and raises the question of the sterling balances, suggesting that the Government are to blame for sending unrequited exports out of the country. Then we have the hon. Member for Bucklow telling us that that is in order to holster up the full employment policy.
What is the trouble with hon. Members opposite? They hate policies of full employment. They think there is nothing like the whip of starvation to keep the lower orders in their place and to keep down the expenses of production. That is their policy. In the second place, they hate this Government almost as much as they hate the Government in the Kremlin. They will do anything to get rid of this Government and they have friends in America who are prepared to do the same. Do not forget the examples we have seen of what has been done by this Government in a country which was bankrupt when the Government took it over. Not a single word has been said about the debts that we pay. All the insinuation is to this effect—"Why do you not make some agreement about sterling balances?"; always giving the impression that we should repudiate these balances or tell the other countries that they will not be paid.
When we incurred these debts the people who gave us what we wanted had no say in the matter. They were told by the mighty armies of this country, "We need this and that and the next thing; we will pay for them after the war." That is the way in which we incurred these debts. And then we are told that at the Washington Conference America laid down the conditions whereby she wanted us to scale down these balances. India

was not represented at the Washington Conference, but she was one of the countries to whom we owed a debt. We are now asked to tell India to scale down the debt because we are not going to pay, while at the same time we owe people in this country, including the big insurance companies and the banks, £25,000 million and we have to pay them £500 million every year in interest. Why not scale that down?

Colonel Crosthwaite -Eyre: His Majesty's Government signed their names to the Bretton Woods Agreement saying that they would scale down these debts. Whatever other argument the hon. Member wishes to adduce, the fact is that the Government signed their name to that proposition.

Mr. Scollan: It was a case of Hobson's choice. When the Bretton Woods Agreement was put before the Government, we had just emerged from the war and men had to be taken out of the Forces and put back into industry. There were 25 million to be transferred to peace-time industry, including the people in the Forces and the people on war work who had to be changed round. There were about 20 million people in industry. I think we have 22 million now. Hon. Members who do not agree with me had better look at the figures.
What were the Government to do? There was only one country in the world which had emerged unimpaired and had the greatest productive machine in the world, the United States of America. To whom else could we go? We had to go to them to get what was necessary. They laid down the terms about scaling down of sterling balances. The people to whom we owed the sterling balances had to consider the matter. They had a say in it. Let us not forget that at the end of the war India was in a position to make certain claims that she could not have made before the war, and she was not going to be fobbed off. She was able to assert herself and to say: "We have earned what we ask for." It is sheer hypocrisy for the hon. and gallant Member for New Forest and Christchurch to bring up a matter like this while he is prepared to advocate that people in this country should draw £500 million in war interest and should not have their balances scaled down. He brings up


matters of this kind to slander the best Government the country ever had.

10.14 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): As I think most hon. Members know, this Debate has been arranged at short notice. Over the last few years we have had a number of debates like it. The more recent ones have been answered by my hon. Friend the Economic Secretary. So far as I know, nothing has been said tonight which has not been said previously. There has certainly been very little that was not said when it used to fall to my lot to reply to a Debate on this subject.
I should like to say before I go any further how much I deprecate the attack made by the hon. and gallant Gentleman the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) on my right hon. and learned Friend the Chancellor of the Exchequer. As he spoke I took the occasion to send out for a copy of the OFFICIAL REPORT which contains the remarks made by the right hon. Gentleman the present Leader of the Opposition. It is true that in the course of that Debate he said:
The question is much discussed in the country of the Chancellor's political honesty.
A certain distance further on, still on the same theme, he said:
Although his personal honour and private character are in no wise to be impugned, it will be impossible in the future for anyone to believe or accept with confidence any statements which he may make as Chancellor of the Exchequer from that Box."—[OFFICIAL REPORT, 28th September, 1949; Vol. 468, c. 167–8.]
I took that, and I think most hon. Members took that, as not unusual exuberance on the part of the right hon. Gentleman the Member for Woodford (Mr. Churchill).

Colonel Crosthwaite-Eyre: rose—

Mr. Glenvil Hall: I must go on. I have only a quarter of an hour. I would give way to the hon. and gallant Gentleman, but I should like to finish this point. Most of us took that as one of the usual exuberances which we get from time to time—in fact, all too often—from the Leader of the Opposition. We have to remember that he still takes his politics in the atmosphere and spirit of 1906, when it was quite usual for politicians of all

schools to be fairly wide in what they said and to pay little attention very often to the exact truth. Therefore, today we take what the right hon. Gentleman says in that spirit. We know very well that the country makes allowances for him because of the great services which he has rendered.
However it is quite another thing for the hon. and gallant Gentleman to come here and reiterate what the right hon. Gentleman said and to give the impression, as he undoubtedly did, that that view is generally held. I have been in my present post long enough to remember the attacks of the same sort which were made on my right hon. Friend the present Chancellor of the Duchy of Lancaster. It is rather interesting that the attacks which were then directed at him are now directed at my right hon. and learned Friend. I can only assume that the hon. and gallant Gentleman made that attack tonight because of what happened at Question Time.

Mr. Scollan: Exactly.

Colonel Crosthwaite-Eyre: As the right hon. Gentleman has now given way, I should like to say that if all the statements he has made and all the insinuations he has made had been applied to his own Front Bench, they would have been far more successful.

Mr. Glenvil Hall: I do not know quite how that dovetails into what I have been saying.

Colonel Crosthwaite-Eyre: The Secretary of State for War.

Mr. Glenvil Hall: I have said what I have said because I felt that it needed saying and because the hon. Member for Bury (Mr. W. Fletcher) suggested that we should not import personalities into this Debate. The hon. and gallant Gentleman began by importing personalities. I never do so if I can help it. However, I believe that what the House expects of me is that I should not pass over innuendoes of that kind in silence. What was it this afternoon which apparently annoyed the hon. and gallant Gentleman? He put a Question to my right hon. and learned Friend and my right hon. and learned Friend answered it. He definitely answered the Question.

Mr. W. Fletcher: As the right hon. Gentleman has tried to find out what it


was that annoyed my hon. and gallant Friend, myself and other hon. Members, may I say that it was that the Chancellor of the Exchequer seized the opportunity, as he always does, to evade the real purpose behind the Question, to sneer in every way and to give the minimum of information as if we were children incapable of understanding it?

Mr. Glenvil Hall: I am sorry if the hon. Member for Bury takes that view—

Mr. Fletcher: I do.

Mr. Glenvil Hall: —but the OFFICIAL REPORT tomorrow will show us exactly what happened. I was sitting next to my right hon. and learned Friend, and I saw what went on and I know what answer he gave to the Question. In fact, he repeated it in order to show quite plainly that he had answered it. What was the Question? It was:
To ask Mr. Chancellor of the Exchequer what loss to the dollar pool of the sterling area has occurred as a result of the recent negotiations between India and the United States in Washington.
To begin with, India is a sovereign country within the British Commonwealth. If she is so minded she can undertake negotiations with the United States. She is perfectly entitled to do that, but here is the hon. and gallant Gentleman asking my right hon. and learned Friend what is the loss to the dollar pool. My right hon. and learned Friend said, "No loss whatever." That was a perfectly truthful answer. There was nothing sneering about it, or underhand, or untrue. The hon. and gallant Gentleman went on to ask a supplementary question, which did not arise out of the main Question, about the possible sale of manganese. What on earth has that to do with the original Question? We do not know whether manganese was discussed but, if it were, that is a matter between the head of the Indian Government and those whom he saw in Washington.

Colonel Crosthwaite-Eyre: May I interrupt the right hon. Gentleman? As I understand it, he says that the sale of manganese by India to the United has nothing to do with His Majesty's Government. Is that correct?

Mr. Glenvil Hall: indicated dissent.

Colonel Crosthwaite-Eyre: Then may I put this point? As I understand it, if there is a sterling area dollar pool from which certain countries may withdraw according to the common need, then one must at the same time ensure that all proceeds of sale by members of the sterling area are credited to that pool. The Chancellor and the right hon. Gentleman are taking the view that the two things are not connected.

Mr. Glenvil Hall: I forget the exact words I used but what I intended to say—and I hope it is what I did say—was that any member of the British Commonwealth is, under the Statute of Westminster, perfectly competent to discuss any question which it feels it should discuss with arty other nation. What always happens so far as India and this country are concerned, in spite of the efforts of the party opposite to drive a wedge between us and the rest of the Commonwealth on these matters, is that India is still, and I hope always will be, a good friend of this country and she will always confer on any matter with us. That, however, is an entirely different matter from the hypothetical question put by the hon. Gentleman as a supplementary, on something about which it is quite obvious he knows nothing.
In the short time at my disposal let me try to deal with this matter in a more general way. The hon. and gallant Gentleman spoke of unrequited exports to Persia because we had paid Persia something like £8 million for the use of her railways during the war. It may interest him and the House to know that he has the facts all wrong—not unusual for him. The facts are that more than two years ago an arrangement which was come to with Persia to pay her for the use of her railways during the war fell due for settlement. Negotiations for the settlement have been going on for some time and at least two years ago, long before devaluation, it was arranged that should a change in money values come—quite properly so, it is the sort of thing that appears in most contracts—that would enter into any calculation or sum that was agreed—

Colonel Crosthwaite-Eyre: Why?

Mr. Glenvil Hall: —and Persia asked for a much higher sum than in the end she agreed to accept.

Mr. W. Fletcher: The right hon. Gentleman must really not try to put it over that it is ordinary commercial practice in contracts to have any other rate than the rate prevailing at the time the debt was incurred.

Mr. Glenvil Hall: Not a bit. I may not have been so long in business—in fact, I have never been in business in the sense that the hon. Member for Bury has been—but I can assure him that what I am now saying is by no means unusual. It may not happen in all cases but it does very often happen in times of instability, particularly after a war, when payments of that kind are made between nations, that bonds stipulate that payment should be made in gold in order that the exchange rate should not enter into the picture when those bonds fall to be paid.
Let me deal with the question of Persia. Is it suggested from the other side of the House that, having made an agreement with Persia to repay her for the use of her railways over a long period during the war, this country should, because of what are, I hope, temporary exchange difficulties, back out of that arrangement and tell them that they would have to go without? I do not know whether a Government formed by the party opposite would take that line, but I can assure the hon. and gallant Member that a Government formed by this party does not do that sort of thing, because two consequences are bound to arise: our good name and fame go down in the world and, secondly, Persia, with whom we desire good relations, would feel that she had been definitely let down by people who had held themselves out to be her friends.

Colonel Crosthwaite-Eyre: rose—

Mr. Glenvil Hall: I am very sorry, but there is a lot I should like to say, because it punctures the balloon which the hon. and gallant Member and his Friends have tried to put up tonight. Owing to shortness of time, however, it will be impossible for me to use all the matter I have here, but I should like to say this: the sterling area is a real entity, and those who belong to it enter into obligations, but they also have certain rights. It would be quite impossible for this country to say that because we owed money to various sister countries within

the Commonwealth, we should, because of our difficulties at home, refuse in any circumstances to let them draw on these balances.

Colonel Crosthwaite-Eyre: We never suggested that.

Mr. Glenvil Hall: What has happened is that amicable arrangements have been made, where the money has been essential to the Dominion concerned, for that Dominion, particularly India—I make no secret of it—to draw on those balances. As has been pointed out both by my right hon. and learned Friend and the Prime Minister in recent Debates, we are now asking not only India, but other countries in a similar position, to realise the situation in which we are; but that does not mean, and it never will mean as long as this Government are in office, that we take a completely selfish point of view and refuse in any circumstances to allow them to draw on their balances.
Let me say a few words on the agreement covering the loan to this country in 1945, to which several hon. Members have referred tonight as the Bretton Woods Agreement. I happen to have here the actual wording. Article 10 quite definitely says that
The Government of the United Kingdom intends to make agreements with the countries concerned. …
for an early settlement. That is entirely different from what has been said tonight. We also said that we would make every endeavour to secure the early completion of those arrangements. Much has happened since then.

Colonel Crosthwaite-Eyre: But what has been done?

Mr. Glenvil Hall: India and Pakistan have become Dominions. We have tried, still are trying and will, we hope, in due time be able to make arrangements with these countries, but there is nothing in the Agreement which indicates that we undertook to make unilateral arrangements without consulting them.

The Question having been proposed at Ten o'Clock and the Debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Half past Ten o'Clock.